Indian companies buy Russian LNG on the spot at a discount

Indian LNG importers buy more in Russia at a discount, as most other spot buyers avoid the Russian resource after Russia's invasion of Ukraine. This was reported by foreign media.

Enterprises including Gujarat State Petroleum Corp. and GAIL India Ltd., recently purchased several spot LNG consignments from Russia at below-market prices. They can buy more as long as Russian LNG remains cheaper than competing suppliers, foreign traders say. India gets nearly three-quarters of its LNG on long-term contracts, but the debilitating heat and ongoing power outages are forcing the country's utilities to replenish stocks with spot supplies that have traded much more than average in previous years due to the global supply crisis. As demand for gas in the fertilizer sector also grows, some importers are buying up Russian supplies at a discount.

Russian LNG consignments were purchased by Indian firms in recent spot tenders, as these consignments were offered at lower prices than other suppliers. Outside of India, only a few LNG importers allow suppliers to offer Russian LNG supplies in procurement tenders.

"The South Asian country, which is also seeking more substantial discounts on Russian oil, has become the last refuge for Russia's LNG, which is traded on the spot market and is being avoided by President Putin's invasion of Ukraine," foreign media reported.

Although there are no direct sanctions against Russian LNG, major buyers, including Japan and South Korea, have suspended purchases to avoid fines or reputational damage in the future, and China's PetroChina Co. said on Friday that it was not looking for spot supplies from Russia at a discount.