India keen to import LNG from Australia: Pradhan

India is looking to raise import of liquefied natural gas (LNG) from Australia but wants the fuel at an affordable price to meet the energy needs of the world's fastest-growing economy.

Oil Minister Dharmendra Pradhan on Wednesday met with Australian Minister for Resources Matthew Canavan to discuss bilateral energy cooperation, an official press statement said here.

"Both ministers stressed on the importance of energy and resources in the bilateral relationship and agreed to expand the scope of cooperation given that India offers a large energy market and Australia is rich in natural resources particularly coal and LNG, apart from uranium," it said.

India already imports 1.44 million tonnes per annum of LNG from Australia on a long-term contract.

"Given India's major initiatives to move into a gas-based economy, there is a significant scope for expanding LNG imports from Australia," the statement said.

India has set a target of raising the share of natural gas in the overall energy basket to 15 per cent by 2030 from the current 6.2 per cent. This shift would cut down the usage of polluting hydrocarbon fuels.

The statement said Pradhan mentioned to the Australian Minister that "Indian consumer is price sensitive, and therefore affordability of LNG imports from Australia will be an important factor in enhancing cooperation in this area."

It did not elaborate.

The comment assumes importance as there is a growing chorus for renegotiating pricing of its long-term LNG import contracts from suppliers such as Australia to help reflect falling rates of the spot market.

Besides Australia, India imports 8.5 million tonne per annum of LNG from Qatar under two long-term contracts and has tied up 5.8 million tonne a year supplies from the US. It also has a 2.5 million tonne import contract with Gazprom of Russia.

While long-term LNG comes for USD 8-9 per million British thermal unit, the same gas is available in the spot market for less than half the price.

India has in the past used its status as Asia's third-largest LNG buyer to renegotiate deals with Qatar, Australia, and Russia. In 2015, it renegotiated the price of the long-term deal to import 7.5 million tonnes per year of LNG from Qatar, helping save Rs 8,000 crore.

In 2017, it got Exxon Mobil Corp to lower the price of Gorgon LNG to save Rs 4,000 crore in import bill and last year convinced Gazprom to lower rates too.

"Minister Canavan underlined Australia's commitment to expanding its ties with India, and highlighted its position as a reliable partner in meeting India's energy security needs," the statement said. "Pradhan called for greater investment flow from Australia to India and the sharing of best practices."

The Indian Minister also called for greater cooperation between the two nations on coking coal.

There is a need, he said, for coordination between two countries by bringing together ministries responsible for coal, mines, petroleum and natural gas and steel of each side to achieve greater synergy and enhance bilateral energy cooperation.

"India being the largest importer of Australian metallurgical coal, a favourable differential pricing mechanism should be worked out," the statement quoted Pradhan as saying. "Pradhan also pointed out that opportunities for collaboration will continue to expand as India's energy mix evolves."

The two ministers agreed to build further cooperation on a wide range of energy resources, which have a multiplier effect on the economy, in the coming months so that the energy pillar of bilateral engagement can be strengthened.