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India Receives First Russian Liquefied Natural Gas Shipment

© Sputnik / Mikhail Voskresenskiy / Go to the mediabankLiquefied natural gas (LNG) plant construction in Yamal, Russia.
Liquefied natural gas (LNG) plant construction in Yamal, Russia. - Sputnik International
India aims to set up a gas trading hub, for which it has struck long-term import deals with a number of countries. The Russian supply comes weeks after India welcomed its first LNG consignment from the US. Qatar and Australia have already lowered LNG prices for India under similar contracts.

New Delhi (Sputnik): India received its first ever cargo of liquefied natural gas (LNG) from Russia on Monday under a long-term deal aimed at transforming the country into a gas-based economy.

India's Minister of Petroleum and Natural Gas Dharmendra Pradhan was present at the import terminal in Mumbai to receive the LNG cargo brought by state-owned gas utility GAIL India Ltd. from Russia's Gazprom. He termed the import as a big achievement.

READ MORE: Russia Agrees to Lower LNG Prices for 20-Year Contract With India

"To bring Russia's Liquefied Natural Gas (LNG) in India is a big achievement in our energy roadmap. In next 20 years, $25 billion worth gas will come to India and nearly $1.5 billion worth of Liquefied natural gas (LNG) will be bought from Russia every year. It is a successful deal between India-Russia," Pradhan told media.

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Gazprom agreed to start supplying LNG after GAIL renegotiated the terms of the 20-year import deal earlier this year. Under the new contract, the price will be fixed at the average of three months Brent as against the earlier contract that stipulated price formulae based on a nine month average of Japanese crude.  

Sources told Sputnik that GAIL had to cut the purchase for the first year due to unavailability of customers and the deferral will now allow GAIL more time to find customers for the imported gas.

READ MORE: Russian LNG is Likely to See Opportunity in China Amid Gas Shortage — Analysts

Earlier, the Narendra Modi-led government had successfully renegotiated the price of LNG with Qatar's RasGas and America's Exxon Mobil Corp. GAIL is also renegotiating contracts with America's Cheniere Energy (Sabine Terminal) and Dominion Energy Cove Point (DCP Terminal).

India is one of the world's largest consumers of energy and its companies are making the most of this position in order to bargain for cheaper imports.

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