Russia’s largest LNG producer Novatek is set to sign a deal with Indian gas distributor GAIL (India) for liquefied natural gas (LNG) supplies as the Russian firm seeks alternative markets to Europe, reported Reuters, citing three industry sources.
According to the sources, the two firms are negotiating the contract terms and an agreement could be signed within a week. The LNG volumes would be based on logistics such as shipping and insurance.
Following LNG purchase cuts by the Western countries in the wake of Moscow’s invasion of Ukraine, Russia is seeking alternate outlets for its energy resources.
Under the proposed long-term deal, Novatek will offer some LNG cargoes each month to GAIL on a free-on-board basis, the sources said.
GAIL is also considering supplying gas to Indian ports as shipping and insurance firms are reluctant to provide services for Russian energy. This is due to the impact of the Western nation’s sanctions on Moscow.
In recent months, the Indian firm has reduced production at its petrochemical plants following the halt of supplies from Gazprom Marketing and Trading Singapore (GMTS) as per the 20-year deal.
Last week, GAIL finance head Rakesh Kumar Jain said the company was in talks with various gas suppliers, including Abu Dhabi National Oil Co, to meet the surging demand in the country.
GAIL executive director A Kaviraj was quoted by the news agency as saying in an analyst call: “We are actively in discussion with a couple of long-term LNG suppliers […] Hopefully, we should be able to conclude at least one contract shortly.”