{"id":2298,"date":"2022-11-11T15:10:56","date_gmt":"2022-11-11T15:10:56","guid":{"rendered":"http:\/\/roydadnaft.ir\/English\/?p=2298"},"modified":"2022-11-11T15:10:58","modified_gmt":"2022-11-11T15:10:58","slug":"india-germany-tussle-over-cancelled-lng-supply-escalates","status":"publish","type":"post","link":"https:\/\/roydadnaft.ir\/English\/2298\/","title":{"rendered":"India, Germany tussle over cancelled LNG supply escalates"},"content":{"rendered":"
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A commercial spat over natural gas has escalated to a diplomatic tussle between Berlin and New Delhi as Europe\u2019s energy crunch takes a growing toll on the developing world.<\/p>\n\n\n\n

Diplomats have been called in to try to resolve a disagreement over a cut in supplies of liquefied natural gas to India by a German-state-backed company, according to people familiar with the matter who asked not to be named because the matter is private. India is also seeking a solution with Russia to fill the supply gap.<\/p>\n\n\n\n

Gas supplies from Germany\u2019s Securing Energy for Europe GmbH to\u00a0GAIL India Ltd. have been disrupted since May after Moscow\u2019s sanctions on the group made it impossible to source cargoes from Russia. India is suggesting the company should source alternative supplies from its portfolio to meet contractual obligations, one of the people said.\u00a0<\/p>\n\n\n\n

The global surge in natural gas costs after Russia\u2019s invasion of Ukraine has hit price-sensitive emerging countries hard. India is paying record amounts to replace canceled supply, that\u2019s if it can find any. With prices soaring, some suppliers to South Asia have simply canceled long-scheduled deliveries in favor of better yields elsewhere.<\/p>\n\n\n\n

SEFE\u2019s Singaporean unit said in September it can\u2019t fulfill its long-term\u00a0LNG\u00a0contract with GAIL. SEFE, a former Gazprom PJSC business now under control of the German government, is paying a small penalty fee of 20% the value of the contractual shipment, a fraction of the value of current spot gas prices in Europe, leaving a big gap for\u00a0GAIL\u00a0to cover to get replacement supplies.<\/p>\n\n\n\n

\u201cAs a result of Russian sanctions against SEFE and its subsidiaries, including SM&T and SM&T Singapore, both the SEFE group and GAIL are affected by the subsequent cessation of supplies,\u201d a SEFE spokesperson said. \u201cSEFE and GAIL are addressing this issue together under their contractual agreements.\u201d<\/p>\n\n\n\n

Spokespeople for GAIL, Germany\u2019s economy and foreign ministries and India\u2019s foreign ministry all declined to comment.<\/p>\n\n\n\n

Finding a diplomatic solution is the aim but pre-arbitration talks are also taking place between SEFE and GAIL, the people said. <\/p>\n\n\n\n

At the same time, India is also looking to Russia for replacement flows. India\u2019s Foreign Minister, Subrahmanyam Jaishankar, visited Moscow earlier this week, according to people familiar with the matter. GAIL has cut supplies to its customers and even lowered production at its own petrochemicals plant because of the shortfall.<\/p>\n\n\n\n

SEFE has canceled 17 cargoes since May, Rakesh Kumar Jain, GAIL\u2019s director for finance, said on an earnings call on Friday. <\/p>\n\n\n\n

GAIL has a contract to receive 2.5 million tons of LNG a year until 2041 signed with the previously-named GM&T, according to data from the LNG importers group GIIGNL.<\/p>\n

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