A former unit of Russian energy giant Gazprom will supply four shiploads of LNG to State-owned GAIL (India) Limited for the first time since it halted supplies in May last year, Union Minister Rameswar Teli said on March 23.
Sefe Marketing and Trading Singapore Pte Limted (SMTS), erstwhile Gazprom Marketing and Trading Singapore Pte Limted, will "supply two cargoes in March 2023 and two in April 2023," Minister of State for Petroleum and Natural Gas Teli said in a written reply to a question in Lok Sabha.
GAIL had in 2012 signed a 20-year deal with Gazprom Marketing and Singapore (GMTS) to buy 2.85 million tonnes per annum of LNG. Supplies started in 2018 and the full volume was to reach in 2023.
GMTS had signed the deal on behalf of Gazprom. GMTS was moved to Gazprom Germania and in early April, Gazprom gave up the ownership of the German unit without giving a reason and placed parts of it under Russian sanctions. This followed West slapping sanctions on Russia for its February 24 invasion of Ukraine. It invoked force majeure and stopping supplies from June 2023.
Sefe, formerly GMTS, "in its Annual Delivery Plan and in their latest communications have maintained their alleged force majeure stance citing various reasons such as Russian sanctions on its LNG source/portfolio and mandate from German authorities (BnetzA) for ensuring energy security for Europe for their inability to deliver LNG cargoes", Mr. Teli said.
However, “while SMTS maintains its force majeure stance, as on date SMTS has informed that they shall be able to supply two cargoes (shipload) in March 2023 and two in April 2023,” he added. “To mitigate the shortfall in Russian supplies, GAIL imposed supply cuts to users from mid-July 2022 to mid-March 2023,” he said.
"These regulations were within the contract executed by GAIL," he said. "In order to meet the shortage, GAIL had sourced spot LNG volumes from domestic/international market and also partially/fully stopped its petrochemical complex at PATA plant for fulfilling supply obligations to the customers," the Minister said.
Under the deal, GMTS was to progressively increase supplies to GAIL. It shipped two million tonnes of LNG in 2021 and was to supply 2.5 million tonnes or a minimum of 36 cargoes in calendar year 2022. The full volume of 2.85 million tonnes is to be reached in 2023. GAIL received one cargo of LNG in June 2023 and nothing after that.
Company officials said Sefe was supplying cargoes from its non-Russian portfolio in Egypt, United Arab Emirates and the United States.