India is scrambling to replace canceled Russian gas supplies, leaving one gas company to pay for the most expensive liquefied natural gas cargo in the country’s history.
GAIL India, the country’s largest gas distributor, bought three LNG cargoes last week at more than $40 per million British thermal units, traders familiar with the matter told Bloomberg on Monday. These are record prices for any LNG cargo to be delivered to India, more than double the prices paid last year.
It’s also a sign the country is scrambling to plug a hole in Russian supplies as competition with energy-strapped Europe has driven natural gas prices sky high.
India has become one of Russia’s biggest buyers of fuel since the invasion of Ukraine, but some of those flows have been disrupted as a result of Germany seizing the local branch of Russia’s Gazprom and instead using the plant to divert supplies to Europe before winter.
The plant, which has been renamed Securing Energy for Europe, told GAIL that it no longer has supplies for India and is currently paying a small penalty for not delivering promised LNG supplies in October.
According to GAIL chairman Manoh Jain, GAIL tried to negotiate with the factory last month but no new agreement has been announced so far.
Jain claimed last month that the failed supply from the plant affected only 10% to 15% of India’s gas supplies and was not significant, Reuters reported, although he noted that the company was concerned about securing gas supplies in the long term.