Gail India sues Gazprom over LNG non-delivery: press

Gail India, a state-owned company, has initiated legal proceedings against a subsidiary of the Russian energy company Gazprom for failing to deliver LNG, Press Trust of India reported on May 19.

The Indian utility is seeking damages from Gazprom but has not disclosed the specific amount. It has filed for arbitration in a London arbitration court and has appointed an arbitrator, while Gazprom is yet to appoint its representative.

"...we are taking up legally against them to press for specific performance and to claim the damages. And our request for arbitration has been filed in a London arbitration court," Press Trust quoted Gail India chairman SK Gupta as saying.

The disruption in LNG supply occurred due to the Russian invasion of Ukraine and the subsequent sanctions imposed on Russia by the West. Gail had a contract with a German subsidiary of Gazprom, and the supplies were hindered when the German government took over the subsidiary and barred it from picking up any cargo from Russia. Gupta said that this was a portfolio contract, and the suppliers were responsible for arranging cargo from alternative sources.

Normal supplies have reportedly resumed in the past two months, but Gail is now paying higher prices than the current spot price due to its pricing contract, which averages prices over the last nine months. The original deal between Gail and Gazprom Marketing and Singapore (GMTS) was signed in 2012 for a 20-year period to purchase 2.85mn metric tons/year of LNG. The supplies started in 2018, and the full volume was expected to be delivered by 2023.