India has decided not to buy liquefied natural gas, or LNG, from Russian projects that are under US sanctions, even as the country faces pressure on energy supplies because of rising tensions in the Middle East, Reuters reported citing sources.
According to two sources who spoke to Reuters, New Delhi recently turned down Russia’s offer to sell sanctioned LNG cargoes. The decision has now left one Russian gas shipment stuck at sea as talks continue over what kind of Russian energy India is willing to accept.
Before the conflict involving Iran disrupted shipping through the Strait of Hormuz, India imported around half of the natural gas it consumed. Nearly 60% of those imports passed through the key waterway. With fuel prices and energy concerns growing, Prime Minister Narendra Modi on Sunday urged citizens to help conserve fuel and save foreign exchange.
India trying to balance energy needs and US sanctions
India is the world’s third-largest importer and consumer of oil. The country has continued buying large amounts of Russian crude oil even after Western sanctions were imposed on Moscow over the war in Ukraine. But LNG cargoes are proving to be a much more sensitive issue.
Unlike oil shipments, which can sometimes be moved quietly through ship-to-ship transfers in the middle of the sea, LNG cargoes are far harder to hide because they can easily be tracked through satellites and shipping systems.
Sources told Reuters that India is trying to strike a careful balance. On one hand, it needs enough fuel to meet growing energy demand. On the other hand, it wants to avoid buying cargoes directly linked to US sanctions because of the legal and financial risks involved.
According to Reuters, India informed Russia about its decision during a visit by Russian Deputy Energy Minister Pavel Sorokin on April 30. During the trip, Sorokin met several Indian officials, including Petroleum and Natural Gas Minister Hardeep Singh Puri.
The source said it was the second meeting between the two sides in just two months. Sorokin is also expected to return to India in June for more discussions.
Russian LNG tanker left waiting near Singapore
One of the clearest signs of India’s hesitation is the situation involving the LNG tanker Kunpeng.
Reuters had earlier reported in April, using shipping data from LSEG, that the 138,200-cubic-metre vessel was heading towards the Dahej LNG terminal in western India.
The cargo came from Russia’s Portovaya LNG plant in the Baltic Sea, which is under US sanctions.
However, one source said the tanker has not been able to unload its cargo because India refused to accept the shipment. The vessel is now near Singaporean waters and is no longer publicly showing a destination, according to LSEG tracking data.
India still buying Russian crude oil
While India has become cautious about sanctioned LNG, it is still purchasing Russian crude oil in large amounts.
The report said these purchases have continued partly because of a temporary US sanctions waiver introduced during the global energy crisis that followed the US-Israeli war on Iran, which began on February 28.
One of the sources said India is still open to buying Russian LNG that is legally allowed under sanctions rules. However, much of that gas has already been committed to European buyers.
The source added that China continues to buy both sanctioned and non-sanctioned Russian LNG in significant amounts.
Source: Financial Express
