Russia’s largest liquefied natural gas (LNG) producer, Novatek, has reportedly been in talks with Indian companies including GAIL on the supply of LNG with possible consideration for payments in rupees.

What Happened? Novatek’s company head Leonid Mikhelson has told Reuters that the company is in talks for a deal with India’s largest gas distributor, GAIL, and other Indian companies as Russia eagerly looks for alternative markets to Europe.

Novatek is interested in working with India not only on LNG supplies but also on equipment and the construction of regasification terminals, the CEO added.

Mikhelson also says that European consumers were interested in Russian LNG, which has not been placed under western sanctions. He goes on to add that no buyer bound by long-term contracts wanted to terminate them.

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Per a Reuters report from last week, the long-term deal proposed by Novatek to GAIL offers a few LNG cargoes every month on a free-on-board basis, which means that the buyer arranges for ships and insurance.

GAIL, however, wants Novatek to deliver its gas cargoes to Indian ports as shipping and insurance companies are watchful of providing services for Russian oil and gas following Europe and the US imposition of sanctions in response to its invasion of Ukraine.

According to data provided by Refinitiv Eikon, Russian gas exports to Europe dropped to a new post-Soviet low in 2022, but its total LNG exports rose to approximately 33 million tonnes, with more than half of it going to Europe.

Price Action: GAIL (India) Limited’s share price was up 0.84% on Tuesday to ₹95.40.

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