Page 14 - GLNG Week 06 2023

GLNG FORMER SOVIET UNION GLNG

Novatek nears LNG deal with India's GAIL

RUSSIA RUSSIAN LNG exporter Novatek is close to meaning it is up to the buyer to sort out ships and
striking a gas supply deal with Indian importer insurance. But GAIL wants Novatek to deliver
GAIL suffered GAIL, sources told Reuters on February 3. gas to Indian ports as shipping and insurance
disruptions in supplies Novatek has reached out to Asian buyers companies are reluctant to deal with Russian
from Gazprom last year. for more offtake deals as European buyers have LNG cargoes.
shunned new agreements. The company could GAIL said in late January that it was in talks
seal a deal with GAIL within a week, Reuters with various LNG suppliers including Abu Dha-
said, with volumes expected to depend on logis- bi-based ADNOC to arrange extra gas supplies
tics such as shipping and insurance. to cope with rising demand.
Neither party has commented on the report. “We are actively in discussion with a couple
GAIL is anxious to strike a relatively low-cost of long-term LNG suppliers…Hopefully, we
gas import deal after seeing its profits slump 93% should be able to conclude at least one contract
in the three months to December versus a year shortly,” its executive director A. Kaviraj told
earlier, after having its supply from a former unit analysts.
of Russia’s Gazprom disrupted. GAIL, India’s GAIL struck a 20-year deal with GMTS in
largest gas distributor, responded by rationing 2012 for 2.5mn tonnes per year (tpy) of LNHG
gas supplies and reducing output at its petro- supply on a delivered basis. At the time, the com-
chemical plants after supplies under a 20-year pany was part of Gazprom Germania, which has
deal with Gazprom Marketing and Trading Sin- since been nationalised by German authorities
gapore (GMTS) were suspended. and renamed Aefe.
The agreement between Novatek and GAIL The initial contract with GMTS was also for
could be signed during Novatek CEO Leonid supplies from Novatek’s 17mn tpy Yamal LNG
Mikhelson’s trip to India this week, according to project in the Russian Arctic. But the former
Reuters. Gazprom unit was procuring supplies from
Novatek is releasing a few LNG cargoes elsewhere to reduce freight costs because the
already every month to GAIL under a long- contract was on a delivered basis, according to
term contract on a free-on-board (FOB) basis, Reuters sources. ™

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