India Scampers For LNG As Ex-Gazprom Unit Falters On Supplies
GAIL India Ltd. is ratcheting up efforts to buy more liquefied natural gas after a former unit of Gazprom PJSC missed shipments.
(Bloomberg) -- GAIL India Ltd. is ratcheting up efforts to buy more liquefied natural gas after a former unit of Gazprom PJSC missed shipments.
The Singapore unit of SEFE Marketing & Trading Ltd., formerly known as Gazprom Marketing & Trading Ltd., has skipped eight LNG shipments to GAIL since late May, leading to a supply deficit, the Indian company’s Finance Director Rakesh Kumar Jain said on a conference call Thursday. The gas utility is making efforts to bring forward other cargoes that are scheduled for 2023 delivery to this year and also buy LNG from the US, he said.
“They are not certain about supplies and are not scheduling cargoes at the moment,” he said, referring to the Singapore unit of SEFE M&T. “We are scouting for new supplies -- short, medium, long-term contracts.”
GAIL has long-term contracts for about 14 million tons per year of LNG, including the one with the Singapore unit of SEFE M&T. India, the world’s third-biggest energy consumer, meets about half of its gas requirements through imports and a supply shortfall could squeeze availability of the fuel for major users such as petrochemical plants, oil refineries, steel mills and fertilizer makers.
READ: Ex-Gazprom Unit Misses India Deliveries as Russia Chokes LNG
Russia stopped dealings with SEFE M&T’s parent after Germany’s regulator seized control of the company in April. Although Moscow in May allowed shipments from Russia’s Yamal LNG project to the company for three months -- after initially blocking it -- that hasn’t materialized in deliveries into India. Yamal LNG is the biggest source of the former Gazprom unit’s long-term supply.
Those cargoes from SEFE M&T in turn made up 8%-9% of GAIL’s total gas sales and could impact its performance if the shortfall persists, the Indian company said in an exchange filing Thursday.
GAIL has already lowered production at one of its petrochemical plants to divert gas for other customers, Jain said. It has also reduced supplies to some customers in India to minimum levels in order to avoid penalties under so-called take-or-pay agreements, he said.
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