Home >Industry >Energy >First long-term LNG cargo from Russia arrives in Gujarat

New Delhi: As part of India’s new energy sourcing strategy, the first Russian long-term liquefied natural gas (LNG) cargo arrived at the Dahej LNG terminal in Gujarat on Monday.

This 3.4 trillion British thermal unit (TBtu) of cargo followed the first US long-term LNG cargo from the Houston-based Cheniere Energy Inc that arrived in India in March.

Indian firms have inked long-term LNG contracts totalling 22 million metric tonnes per annum (mmtpa), with the country consuming 145 million standard cubic meters a day (mmscmd) of gas. India, the world’s fourth-largest LNG importer, has also been trying to leverage the glut in global LNG supplies to renegotiate its contracts.

“The first LNG cargo under the long term contract between GAIL and Gazprom Marketing & Trading Singapore (GMTS) of Russia arrived today at the LNG terminal of Petronet LNG Ltd (PLL) in Dahej, Gujarat," GAIL said in a statement.

Major energy consumers such as India are seeking better prices as new natural gas suppliers such as Mozambique, Tanzania, Egypt, Israel, Canada and Cyprus expected to enter the LNG market. India imported 19 million metric tonnes of LNG in 2016-17.

The starting of LNG imports from Russia has added a new dimension to Indo-Russian bilateral relations, particularly in the oil and gas sector, said India’s petroleum minister Dharmendra Pradhan, who was present on the occasion, according to the statement.

Indian firms have invested $10 billion in acquiring stakes in hydrocarbon assets in Russia. Also, a consortium led by Russia’s Rosneft PJSC acquired Essar Oil Ltd for nearly $13 billion.

LNG imports from Russia will go a long way in mitigating risks arising out of geopolitical uncertainties, Pradhan said.

This comes at a time when there has been growing uncertainty in the global energy market with US President Donald Trump pulling his country out of a 2015 historic accord with energy-rich Iran that was inked to curb the Islamic Republic’s nuclear programme in return for ending sanctions. Also, factors such as growing cooperation between OPEC and Russia to control supplies, falling production in Venezuela and geopolitical tensions have fuelled the uncertainty in international energy prices.

“GAIL became the first Indian public-sector company to source LNG from Russia on a long term. It has contracted to import 2.5 mmtpa of LNG from Gazprom Marketing and Trading Singapore on a long term basis," the statement added.

This comes at a time when the National Democratic Alliance government is pushing for a gas-based economy. India plans to connect 10 million households to piped natural gas by 2020. The government also plans to provide free cooking gas connections to 80 million poor families under the Pradhan Mantri Ujjwala Yojana.

Gas accounts for around 6.2% of India’s primary energy mix as compared to a global average of 24%. The government plans to increase this to 15% by 2030. India’s gas demand is expected to be driven by the fertiliser, power, city gas distribution and steel sectors.

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