GAIL Delivered Setback in Bid to Renegotiate Gazprom LNG Deal

Russia is scheduled to start 20-year LNG supply deal in April
Indian utility struggles to find domestic buyers for its gas

Frosting forms on a pipe as it dispenses liquefied natural gas (LNG) on-board the Gallina LNG tanker after docking at the National Grid Plc's Grain LNG plant on the Isle of Grain in Rochester, U.K., on Saturday, March 4, 2017. The shipment to England on the Gallina was priced using the U.K.'s National Balancing Point, where front-month gas cost about $7 a million British thermal units on Feb. 7.Photographer: Jason Alden/Bloomberg

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By Rajesh Kumar Singh and Debjit Chakraborty

November 27, 2017 at 2:04 AM EST

Updated on

November 27, 2017 at 7:35 AM EST

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GAIL India Ltd. received notification from Russia’s Gazprom PJSC that it plans to start deliveries of liquefied natural gas through a contract the Indian buyer is trying to renegotiate, according to people with knowledge of the matter.

The world’s largest gas producer wrote to GAIL this month saying it’s preparing to send cargoes from April under the 2.5 million-ton-a-year deal that was agreed in 2012, according to the people, who asked not to be identified because the information is private. The notification, which is standard practice before a contract starts, is seen as a setback for GAIL’s efforts to renegotiate, said the people.

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