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    India Receives First Gazprom Cargo


India has received its first LNG cargo from Gazprom under long-term deal, but it is not a Russian cargo.

by: Shardul Sharma

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Natural Gas & LNG News, Asia/Oceania, Security of Supply, Corporate, Import/Export, Liquified Natural Gas (LNG), News By Country, India, Russia

India Receives First Gazprom Cargo

India received its first LNG cargo from Gazprom June 4 on LNG Kano under a long-term deal at Petronet’s Dahej terminal in the state of Gujarat, Indian oil minister Dharmendra Pradhan said on Twitter.  Gazprom supplied the 3.4 trillion Btu (95.8mn m3) cargo from Nigeria, Press Trust of India reported. 

The Russian giant does not have any long-term contract with Nigeria LNG, which also owns the ship LNG Kano, so Gazprom is understood by NGW to have been purchased the cargo on a spot basis. 

“The arrival of today’s cargo marks a historic milestone in India-Russia energy ties and has built another strong bridge to 70 years of bilateral friendship,” Pradhan said. In January 2018, Gail and Gazprom said they had re-negotiated and amended their long-term LNG sale and purchase agreement (SPA), originally signed in the year 2012.

“It is also satisfying that Gail and Gazprom have amended the LNG sale purchase agreement with volume ramp-ups and reduction in prices. In later stages, this contract will allow India to import LNG from Russia’s Yamal project,” the minister said. "India views Russia as a significant partner in augmenting the natural gas infrastructure in the country as well as a major supplier for it’s oil & gas demands of future. Look forward for continued efforts from both the countries to strengthen engagements in the hydrocarbon sector."

Gail will buy 2.5mn mt/yr of LNG under 20-year contract. Gail chairman BC Tripathi said the contracted volume has been lowered from 2.5mn mt to 0.5mn mt in the first year 2018-19, 0.75mn mt in 2019-20, 1.5mn mt in the third year 2020-21. Gail will start importing full 2.5mn/yr by the fourth year and make up for the initial volume reduction over the remaining length of the contract. Pricing has been changed from nine-month linkage to JCC (Japanese customs-cleared crude) to a three-month average of Brent. In return the full term of the deal has been extended by two to three years.

“This is the 3rd long-term supply contract by Gail this year resulting in availability of 25-30mn m3/d of additional gas for India. LNG sourced will be used to develop the natural gas market in India and increase the contribution of natural gas to 15% in India’s energy basket,” the minister said.

In March, Gail received its maiden LNG cargo from the US from Cheniere Energy's LNG export facility at Sabine Pass LNG project. Pradhan said that India now has four long term LNG contracts with Qatar, US, Australia and Russia.