Despite the geopolitical crisis, India’s biggest gas company GAIL has been steadily sourcing LNG under a long-term deal with Russia’s Gazprom, the company’s chairman and chief executive, Manoj Jain, said on Friday.
GAIL has a long-term agreement to import 2.85 million tonnes per year of liquefied natural gas (LNG) from a Gazprom unit based in Singapore.
“There have been some disruptions but supplies have been steady,” Jain told reporters here.
Earlier this month, Moscow imposed sanctions on the owner of the Polish part of the Yamal pipeline that carries Russian gas to Europe, as well as the former German unit of Russian gas producer Gazprom.
Sanctions aimed at stopping the flow of Russian gas to Europe have been imposed on Gazprom Germania and 29 of its subsidiaries in Switzerland, Hungary, Great Britain, France, Bulgaria, Benelux, the States, Switzerland, Romania and Singapore.
GAIL has a contract with the Singapore unit.
“We are learning from the media that the sanctions have been suspended for 90 days,” Jain said, adding that the company was in talks with Gazprom over the supplies.
Gazprom Marketing & Trading Singapore, he said, regularly supplies LNG under a long-term agreement.
There were minor adjustments such as splitting shipments and postponing a shipment that was due for delivery this month, he said.
“We don’t see any disruption to our supplies under the deal because ours is a portfolio contract, which means Gazprom can supply gas from anywhere in the world,” he said. .
Gazprom supplies LNG from Russia as well as its global portfolio.
GAIL expects Gazprom to supply around 40 LNG shipments in 2022 and a full contract volume of 46 cargoes in 2023, under its forward agreement.
As part of the deal, Gazprom is gradually increasing supplies to GAIL. It shipped 2 million tons of LNG in 2021 and must supply 2.5 million tons in 2022. The total volume of 2.85 million tons must be reached in 2023.
Jain said his company is looking for longer-term LNG to meet growing local demand.
“We are not looking at short-term contracts because they are more expensive. We want 1 million tonnes a year of long-term supplies to start with,” he said, adding that GAIL was considering a 10-year deal. years with supplies from January. 2023.
GAIL expects to import 5-6% higher LNG volume in the current fiscal year 2022-23.
Asked about investing in Russian projects, he said GAIL might consider a stake “if it makes economic sense. However, there is nothing on the table yet.”
“We can look at it provided it has economic value,” he said.
The United States and European countries have imposed heavy sanctions on Russia since Moscow sent troops to Ukraine on February 24. Some Western oil companies have announced their withdrawal from Russian projects and Indian companies are seen as natural candidates to participate.
India increased its oil imports from Russia after the Ukraine war despite criticism from the West and continues to engage Moscow for business.
GAIL, Jain said, will bid to buy natural gas from tough domestic fields and will also source LNG to meet demand from city gas distributors.
It will buy 1 LNG cargo on the spot or current market every 30-40 days to meet the town gas demand for now.
He bought a spot cargo for May for town gas and will buy another for next month.
The government has asked GAIL to pool natural and imported fuel available locally for the supply of CNG and pipeline cooking gas operators in the country.
The company will invest Rs 30,000 crore over the next three years in pipelines, petrochemicals and other projects, he added.
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