The bilateral accord was reached last week when Shinzo Abe, acting secretary-general of Japan’s ruling Liberal Democratic Party, visited India and met Indian Prime Minister Manmohan Singh.

The two governments are due to negotiate further details before Japanese Prime Minister Junichiro Koizumi visits India late next month.

Tokyo is aiming to diversify its energy sources through the deal, as well as strengthen ties with New Delhi.

Japan imports about 97% of all natural gas it consumes, mostly from Indonesia, Malaysia and Australia.