Reuters: India and Russia plan to resume supplies of Russian LNG

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented on the possible supplies of Russian LNG to India to Business FM:

"India did not purchase Russian LNG for non-political reasons. It was a purely economic, mutual decision. Russian LNG was bought up in Europe and Northeast Asia. So far, there has been no need to send it additionally, and for India, Russia is a rather distant supplier with high logistical costs. India is one of the most attractive and promising LNG markets in the world, but it has an unstable growth rate. It often stagnates, sometimes decreases, because India still relies on its own production, which is growing slowly. LNG imports are quite expensive for India. India needs more than just cheap LNG, preferably at a cost below $5. Russia offers it mainly from $8. Therefore, for India, as the engine of South Asia, the issue of price is fundamentally important. Russian LNG was simply not interesting in terms of price and logistics.

It is possible to reach an agreement now, because there is a shortage in the global LNG market, spot prices are rising, and LNG is becoming competitive in Russia under current conditions, but this is a temporary phenomenon until prices drop again. Here we need to look for more long-term mutual support in cooperation, that is, investments in gas consumption, gas distribution, and gas generation. Russia needs not only to be an LNG supplier, but also to do something else in order to gain a foothold in this market. It's not that easy, funds are required, it's not a quick process, but now it's more like a temporary arrangement. Apparently, some volumes from Europe that came from the Yamal LNG plant will be redirected, but these are small volumes in the range of 1-2 million tons per year. Hardly more."