Two deliveries of Yamal LNG to India this fall did not save the situation, and the company nationalized by Germany from Gazprom will have to answer in court for the short supply of Yamal LNG. Gail is demanding $1.87 billion. The missing gas could have remained in Europe, where last year there was high demand for fuel and abnormally high prices.
On November 30, the Indian state-owned company Gail filed a claim with the London Court of International Arbitration against SEFE Marketing & Trading Singapore Pte. Gail said this in a disclosure to the National Exchange of India.
As the state-owned company indicates, the claim amounts to up to $1.87 billion and alternative compensation, including non-monetary compensation. The reason is the short supply of LNG under a long-term contract.
SEFE Marketing & Trading Singapore Pte is owned by the German SEFE and, like the parent company, previously had the name Gazprom in its name and was owned by the Russian company itself. However, in early April last year it was nationalized by the German government. After this, the company was renamed.
Nevertheless, on behalf of Gazprom, SEFE retained a valid long-term contract both for the purchase of gas from Yamal LNG (2.9 million tons or 4 billion cubic meters) and for the supply of LNG to Indian Gail (2.5 million tons of LNG or 3.45 billion cubic meters).
As reported EADaily , in May last year, SEFE stopped fulfilling the Indian contract, despite the fact that the Russian government made an exception for it from the package of counter-sanctions. Judging by the ships’ AIS, Yamal LNG continued to be supplied to Europe, but was not reloaded onto tankers in India, as was the case before. Novatek reported on the fulfillment of all obligations to counterparties. In the EU, a rush demand for gas began due to a reduction in Gazprom supplies, and Yamal LNG for India could already be sold in Europe, where prices were several times higher than the contract prices.
The Press Trust of India (PTI) reported, citing a senior official, that SEFE pays a fine of approximately $100 per thousand cubic meters that were not delivered to India under the contract (20% of the price). However, this was beneficial to the trader, since he sold fuel in EU countries at three times the contract price.
Indian sources said New Delhi was applying pressure at both company and government levels to ensure supplies resumed. The cessation of imports of Russian LNG led to the Indian company reducing gas consumption at its own plants, starting to purchase additional volumes from other sources and introducing restrictions on gas supplies to consumers. The volumes supplied by Gazprom Marketing and Trading account for 8-9% of Gail’s total gas sales and could have a physical impact on the company, the company said in a statement.
SEFE resumed supplying LNG to India this year. But under another Gazprom contract, which she inherited, the Cameroonian one. And in the fall, it delivered two cargoes of Yamal LNG. Obviously, the volumes were insufficient.
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2023-12-03 01:29:00
