Russia defaults on gas supplies to GAIL

Russia has defaulted on the supply of at least 5 cargoes or shiploads of LNG to India after its retaliatory sanctions hit one of the companies that supply gas to India.

India’s largest gas firm GAIL has a long-term deal to import 2.85 million tonnes of liquefied natural gas (LNG) per annum from a Singapore-based unit of Russian gas producer Gazprom.

The company has since June defaulted on the supply of 5 cargoes of LNG under that contract citing difficulty in sourcing gas due to sanctions.

GAIL is now scouting for alternatives including tying up supplies from other sources in the US and the Middle East.

Moscow has in recent months-imposed sanctions on 31 companies, including the owner of the Polish part of the Yamal pipeline that carries Russian gas to Europe, as well as the former German unit of Gazprom.

GAIL is exploring legal options to enforce the contract. Previously, Gazprom made minor adjustments such as splitting shipments and rescheduling one cargo that was supposed to be delivered in May. But now it has defaulted on supply of 5 cargoes, including two in July.