Resplendent Agreement Between the Global Energy Major, Exxon Mobil Corp and Indian Oil Corp (IOC) to Ease Natural Gas Transport

  • 28-Feb-2020
  • Journalist: Jaideep

Exxon Mobil Corporation is one of the world's largest publicly traded energy firms and a prominent chemical manufacturer. With a motive to develop and provide next-generation technology to the world and to meet the growing need of energy by establishing a system of transportation infrastructure to expand gas access to India, the company has inked a pact with the leading Indian crude manufacturer, Indian Oil Corporation Limited. The deal will enable the transport of natural gas via containers, to hundreds of cities in the country that are not connected through the gas pipeline network. This initiative was taken to proliferate the use of clean fuel in the country, as well as to promote the energy tie-up of US-India. Since the last financial year 2019, US has turned out to be the leading energy supplier to India, with total liquefied natural gas (LNG) crude oil imports estimating to INR 4797.8 billion. Mr. Alex Volkov, the Chairman of Exxon Mobil Corporation said that the deal will create a hefty and definitive pathway for the transportation of Natural gas, via means of roadways, railways or waterways, to distant places. Moreover, this agreement would help India raise the share of Natural gas in its energy basket to 10 per cent which currently stands at approximately 6.2 percent. Although this figure is much lower than the global average of 24%, India is continuously striving to adopt the clean fuel, not only in the industries but also in households where supply is easily available. The government officials said that the pact with US would help to reduce India’s dependency on volatile Middle East crude oil market as almost 80 percent of country’s crude oil is imported from the MEA region. Country’s dependency on crude oil imports is further enhanced due to the decreased domestic production due to lack of significant new discoveries. India has started importing LNG and crude oil from the US only since the past 2-3 years, but trade has increased significantly. IOC finalized the contract last year in the month of February after which it became the first Indian state-run company to sign such a deal with the US.

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