India Refuses To Buy Russian LNG

Because of American sanctions.

India has rejected Russia's offer to supply liquefied natural gas under U.S. sanctions despite energy shortages caused by conflict in the Middle East. The Reuters was told by two sources with direct knowledge of the situation. New Delhi's decision has put a tanker carrying Russian LNG, which was previously bound for India, in an uncertain position, the agency noted.

The sources said the Indian side informed Russian Deputy Energy Minister Pavel Sorokin of its refusal during his visit on April 30. At that time, he held a meeting with Indian officials, including Petroleum and Natural Gas Minister Hardeep Singh Puri. It was their second meeting in the past two months and, as one of the agency's interlocutors clarified, Sorokin may return in June to continue talks.

India's refusal concerns, among other things, cargo from the Portovaya plant in the Baltic Sea, which is under U.S. sanctions. As one of Reuters' sources noted, in mid-April, documents listed India as the destination for a shipment of this LNG, but it ended up being impossible to unload it. At the same time, they tried to present the cargo as non-Russian.

India's position reflects an attempt to strike a balance between the need to secure energy resources and the risks associated with the purchase of sanctioned fuel, Reuters points out. As the agency's sources note, LNG supplies are much harder to conceal than oil supplies, as they are more easily tracked by satellite systems.

At the same time, India continues to buy Russian oil by sea. This is facilitated by the temporary easing of U.S. sanctions imposed to support the global hydrocarbon market amid the energy crisis.

Reuters sources also note that India is ready to consider purchases of authorized Russian LNG, but a significant part of such volumes has already been contracted by European countries. At the same time, China, according to them, remains one of the largest buyers of both sanctioned and non-restricted Russian LNG.

Russia, in turn, is interested in signing long-term contracts with India not only for the supply of gas, but also fertilizers - potash, phosphorus and urea.

Before the aggravation of the situation around Iran, India covered about half of its gas needs through imports, with about 60% of supplies passing through the Strait of Hormuz. More than half of its oil imports were also through this route.

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