Indias biggest gas supplier GAIL Ltd begins to conserve gas as Russia’s Gazporm beigins to ration

GAIL Ltd, India’s largest gas producer has initiated gas conservation by lessening the supplies to fertiliser and industrial customers after the imports were struck under the deal with Gazprom, a former unit of Russian energy tech.

Consequently, the minimal gas supplies will have a great impact on India’s urea production. The U.K based energy trading company Gazprom Marketing and Trading Singapore (GMTS), failed to deliver some of the liquefied natural gas (LNG) cargos to the GAIL. GMTS has said that it may not be able to deliver the LNG supplies under their long-term deal.

In order to conserve gas for other clients, they said that the state-run business is running its petrochemical facility at Pata in northern India at roughly 60% capacity. One of the individuals noted that GAIL had advanced maintenance closure of some units at the 810,000 tonnes per year plant.

Last month, GAIL purchased a spot LNG cargo for August loading at a price of $38 per million British thermal units (mmBtu), far more than the $12–$14 per mmBtu it was paying for gas as part of its contract with Gazprom.

In 2012, GAIL and Russia’s Gazprom reached a 20-year agreement for the annual purchase of 2.5 million tonnes of LNG on average. The contract’s supply obligations started in 2018.

The contract was signed on behalf of Gazprom by GMTS. Gazprom Germania was a division of the Russian state corporation during the time.

However, as a result of Western sanctions against Russia for its invasion of Ukraine, Gazprom abruptly ceded ownership of Gazprom Germania in the early days of April and subjected some of its operations to Russian restrictions.