The MoU also paves the way for greater cooperation between energy sector companies in India and Saudi Arabia
India and Saudi Arabia signed a historic comprehensive cooperation agreement in the field of energy Tuesday.
The MoU is expected to result in enhanced ties between India and Saudi Arabia in renewable energy, energy efficiency, hydrogen, electricity and grid interconnections, petroleum, natural gas, strategic petroleum reserves and energy security.
It also seeks to encourage bilateral investment in the fields of renewable energy, electricity, hydrogen and storage and oil & gas, as well as create an enabling environment for circular economy and technologies to reduce the effects of climate change through carbon capture, utilisation and storage.
The agreement was inked at the first meeting of the India-Saudi Arabia Strategic Partnership Council between Raj Kumar Singh, India’s minister for Power and New & Renewable Energy, and Abdulaziz bin Salman Al-Saud, Saudi Arabia’s Minister of Energy.
As Business Today reported Sunday, the agreement comes in the immediate aftermath of Prime Minister Narendra Modi announcing the India-Middle East-Europe Economic Corridor (IMEC) at the 18th G20 Summit held over the weekend. Saudi Arabia is one of the founding partner countries of the IMEC.
“We have partnered to start work on the historic India-West Asia-Europe Economic Corridor. This corridor will not only help bring the two countries together but will also lead to greater synergies in economic cooperation, energy sector and digital connectivity between Asia, West Asia and Europe,” Prime Minister Modi said in his opening remarks at the meeting.
“The two sides highlighted the importance of energy cooperation as an important pillar of the strategic partnership between the two countries, and stressed the importance of supporting the stability of the world's oil markets by encouraging dialogue and cooperation between producing and consuming countries and ensuring the security of energy supply sources in the world markets,” the two countries said in a joint statement released late Monday evening.
As the world’s fastest-growing major economy, India has emerged as the world’s third-largest primary energy consumer, while Saudi Arabia is the second-largest crude oil producer globally.
Changing priorities
India has targeted to achieve 5 million tonnes (MT) of green hydrogen capacity annually, along with an additional 125 GW of renewable energy capacity by 2030 under the National Green Hydrogen Mission announced in August 2021 as part of the national effort to diversify its energy basket. The country also announced the formation of the Global Biofuels Alliance for enhanced recycling of agriculture and forest residue, Municipal Solid Waste (MSW), cow dung, etc., for conversion to biofuels such as ethanol and ammonia.
Saudi Arabia, the largest and most populous country in the Arabian Peninsula, has been trying to diversify its economy away from an overdependence on oil by focusing on investments in technologies such as artificial intelligence (AI) and blockchain, gaming, encouraging foreign investments and tourism under its Vision 2030 document.
The two countries will, therefore, also be working on promoting digital transformation, innovation and cybersecurity and AI in the energy sector.
Efforts will also be made towards developing qualitative partnerships between the two countries to localise materials, products and services related to all sectors of energy, supply chains and their technologies. In this regard, cooperation with companies specialised in the field of energy would be strengthened.
