Russia defaults on LNG supplies to India

GAIL is now scouting for alternatives including tying up supplies from other sources in the U.S. and West Asia

Russia has defaulted on the supply of at least 5 cargoes or shiploads of LNG to India after its retaliatory sanctions hit one of the companies that supply gas to India, sources said.

India’s largest gas firm GAIL has a long-term deal to import 2.85 million tonnes of liquefied natural gas (LNG) per annum from a Singapore-based unit of Russian gas producer Gazprom.

The company has since June defaulted on the supply of 5 cargoes of LNG under that contract citing difficulty in sourcing gas due to sanctions, two sources briefed on the matter said.

While the contract provides for making up of the volumes not supplied later, the Russian firm has so far nor indicated how and when it will make up for the lost volumes.

Sources said Gazprom has told GAIL that it will from hereon supply LNG on a best endeavour basis.

GAIL is now scouting for alternatives including tying up supplies from other sources in the U.S. and West Asia.

Moscow has in recent months imposed sanctions on 31 companies, including the owner of the Polish part of the Yamal pipeline that carries Russian gas to Europe, as well as the former German unit of Gazprom.