India gets cheapest LNG as Russia's Gazprom begins supplies

India today received its first liquefied natural gas (LNG) cargo from Gazprom at the Petronet LNG terminal in Dahej.

The LNG vessel “LNG Kano” carried 3.4 TBTU of LNG, the Cargo under the long term contract between GAIL and Gazprom Marketing and Trading Singapore (GMTS) of Russia.  As per the contract, the two companies GAIL will purchase about 2.5 million tonne of LNG from Gazprom on annual basis. The company is also planning to bring at least 80 cargoes of US LNG during the current fiscal.

In the last few years, Indian companies have made an investment of more than $10 billion in acquiring varying stakes in strategic Russian projects Sakhalin-1, Vankorneft and Taas-Yuryakh. On the other hand, Russian company led consortium has committed an investment of $13 billion in Esaar Oil in 2016.

The cargo was received by petroleum minister Dharmendra Pradhan and top honchos of Gazprom at Dahej. He mentioned that government is committed to transforming India into a gas-based economy. To realize this aspiration, investments are being made for augmenting natural gas infrastructure, including pipelines, LNG import terminals and City Gas Distribution networks.

Pradhan said that LNG imports from Russia will go a long way in mitigating the risks arising out of geo-political uncertainties.  GAIL became the first Indian public-sector company from India to source LNG from Russian side on a long term.

Russia is currently, world’s largest crude oil and second largest gas producer in the world, while India is world’s third largest energy consumer and fourth largest importer of LNG. This comes a few weeks after India's first LNG cargo from the United States landed at Dhabol regassifocation terminal in Maharashtra. GAIL has already signed a $32 billion supply deal with the Domimion Energy Cove Point project in Maryland and the Cheniere Energy's Sabine Pass project in Louisiana for 20 years.