India will on 04 June 2018 import its first ever cargo of LNG from Russia under a long-term deal as the world’s fourth-largest buyer of liquefied natural gas (LNG) diversifies its import basket to meet its vast energy needs.
State-owned gas utility GAIL India Ltd will bring the shipload of LNG from Gazprom at Petronet LNG Ltd’s import terminal here, official sources said. Beginning of supplies from Russia comes within weeks of India importing its first ever LNG cargo from US under a long-term import deal.
GAIL has renegotiated with Russian supplier Gazprom the terms of the 20-year deal to import 2.5 million tonnes a year of LNG. Both price and volume ramp-up have been renegotiated. GAIL has committed to importing the full 2.5 MT a year by the fourth year and make up for the initial volume reduction over the remaining length of the contract.
Under the re-worked deal with Gazprom, the duration of the contract has been extended by three years and the Indian company has agreed to buy an additional six million tonnes of LNG volumes. GAIL had signed the original deal on August 29, 2012 with Gazprom Marketing and Trading Singapore Pte Ltd (GMTS), Singapore. The deal was renegotiated in January this year. Gazprom will supply LNG from Yamal LNG project in the Arctic peninsula.
India has been making the most of its position as one of the world’s biggest energy consumers to strike better bargains for its companies. In late 2015, it had renegotiated price of the long-term deal to import 7.5 MT per year of LNG from Qatar, helping save Rs 8,000 crore. The contract was renegotiated outside the contractually specified renegotiation period, with the eventual removal of the 60-day moving average ceiling and floor price and waiver of USD 1.5 billion in penalties under the take-or-pay clause for volumes that Petronet had not imported.