New Delhi, Oct 29 (IANS): The cabinet Wednesday approved the signing of a memorandum of understanding (MoU) between India and Mozambique for five-year cooperation in the oil and gas sector.

The MoU seeks cooperation in oil and gas in both upstream and downstream sectors in the area of enhancing capacity-building, forging closer cooperation between research and training centres and intensifying technology transfer, among others, an official statement said here after the cabinet meeting presided over by Prime Minister Narendra Modi.

"Mozambique is strategically located near India and is ideally suited for bringing natural gas to India at market determined price. Participation of indian energy companies in the project will facilitate access to LNG for the growing Indian gas market," it added.

Mozambique plans to produce 34 million tonnes of liquefied natural gas from its biggest gas field - the Rovuma Area 1 offshore block - where state-run ONGC Videsh Ltd, Oil India and Bharat Petroleum Corp have bought 30 percent stake and will also participate in the LNG project.

Ten LNG terminals are likely to be set up, each with a yearly capacity of five million tonnes of gas.

US-based Anadarko Petroleum Corp is the Rovuma 1 project operator. Other partners include Empresa Nacional de Hidrocarbonetos EP of Mozambique, Mitsui of Japan and PTT Exploration and Production of Thailand.

India currently has 18,000 MW of power capacity lying idle due to gas shortage, with another 10,000 MW in the pipeline awaiting commissioning.