After crucial Russian deliveries were suspended, India bought some of the most expensive liquefied natural gas shipments the country has ever received. For a delivery between October and November, GAIL India Ltd. purchased a number of LNG cargoes at a price that was more than two times what it had spent at the same time the previous year.
The company, which has its headquarters in New Delhi, is striving to replace the supply from the former trading division of Gazprom PJSC, which Germany nationalized earlier this year and is now paying fines in accordance with its contract rather than supplying fuel.
Price-sensitive emerging nations have been heavily hurt by the global spike in natural gas prices following Russia’s invasion of Ukraine; they are now forced to pay the high spot market rates or risk blackouts and industrial shutdowns. Due in part to rising fuel prices, India’s retail inflation spiked in August.
According to news reports, GAIL this week purchased three LNG shipments for delivery from October to November for more than $40 per million British thermal units, making them some of the most costly cargoes ever delivered to India.
Just before the 20-year contract with Gazprom’s marketing branch in Singapore began in 2018, the company had secured price and volume reductions. Technically, that division belonged to Gazprom Germania GmbH, which the German regulator seized in April and renamed Securing Energy for Europe GmbH.
The new company has stated that it is unable to obtain petroleum from Russia’s Yamal Peninsula and that it is unable to transport fuel to India. The contractual penalties for non-delivery it is paying to GAIL are most likely a small portion of the current spot rates.Share This