India's GAIL buying spot LNG to hedge against Red Sea delays
QUITOL, India, Feb 8 (Reuters) - India's state-run GAIL (India) Ltd is selling more U.S. liquefied natural gas (LNG) in European markets and making spot purchases to avert delays due to the Red Sea crisis, head of marketing Sanjay Kumar told a press conference.
"It was an operational requirement. We had to sell some of our U.S. LNG in Europe to manage our shipping schedule," Kumar told reporters at the Indian Energy Week conference.
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The Bab-el-Mandeb strait at the southern end of the Red Sea has been disrupted by attacks on commercial vessels by Houthi militants, driving up freight costs and restricting traffic.
Kumar said the Red Sea crisis was delaying the supply of LNG by up to seven days as cargoes were now diverted around Africa's Cape of Good Hope. The Indian importer has four LNG carriers on long term charter and a delay could have impacted its supply commitments.
GAIL has long term deals to buy 5.8 million tonnes a year of U.S. LNG, split between Dominion Energy's Cove Point plant and Cheniere Energy's Sabine Pass site in Louisiana.
"That's how we manage any generic cargo which comes from Cheniere in Gulf of Mexico to Dahej (terminal) through the Suez Canal. Compare that to the Cape of Good Hope (route), it takes 6.5-7 days extra. This move has helped us cut our voyage time," Kumar said.
(Reporting by Nidhi Verma and Sudarshan Varadhan. Writing by Seher Dareen. Editing by Jason Neely and Mark Potter)