GAIL seeks $1.8 bn from ex-Gazprom unit

New Delhi, December 1

State-owned GAIL India Ltd on Friday said it has started legal proceedings to seek $1.8 billion against a former unit of Russian energy giant Gazprom for non-delivery of liquefied natural gas (LNG).

The claim has not been filed against the Russian company but against Sefe Marketing & Trading Singapore for non-supply of the contracted gas from June last year to April this year.

GAIL made a stock exchange filing in which it mentioned an arbitration claim before the London Court of International Arbitration for “non-supply of LNG cargoes under long-term contract.”

The contract had a smooth run from the time supplies started in 2018. But it got entangled in takeovers and sanctions of Gazprom subsidiaries by western countries. GAIL signed the 20-year-old contract in 2012 for 2.85 million tonnes per annum of (LNG) with Russian energy giant Gazprom’s Singapore subsidiary, which was a unit of Germany-based Gazprom Germania.

Later, the German government took over Gazprom Germania and it was renamed Sefe.

Sefe stopped supplying LNG to the Indian company in June last year to meet its own demand.

GAIL says supplies cannot be stopped arbitrarily and the supplier should have arranged for the cargo from other destinations.