India's largest gas company, GAIL, is open to buying Russian oil and gas assets shunned by Western companies after Moscow's invasion of Ukraine if the deal made commercial sense, the company's Chairman, Manoj Jain, said on Friday.
European countries and the United States have imposed heavy sanctions on Russia since Moscow sent troops into Ukraine on February 24, and the EU has proposed its toughest package of punishments yet, including a ban on crude oil in six months.
India has tried to balance its ties with Russia and the West, but unlike other members of the Quad countries — the United States, Japan, and Australia — it has not imposed sanctions on Russia.
"Why would anyone say no [to Russian assets] if it makes commercial sense?" Mr. Jain told reporters at a post-earnings press conference. GAIL reported a 39% rise in quarterly profit.
GAIL is considering buying gas from challenging local fields to address surging local demand for natural gas, including striking long-term liquefied natural gas (LNG) import deals with global companies.
Mr. Jain said GAIL is scouting for a 10-year deal to annually import 1 million tonnes of LNG.
Natural gas buyers in Asia are seeking to lock in supplies via long-term contracts as a buffer against volatile global prices, in moves that will reverse the last decade's trend of increasing spot purchases.
GAIL has a long-term gas import deal with Gazprom Marketing & Trading Singapore to buy an average of 2.5 million tonnes per year.
Under the deal, Gazprom is progressively increasing supplies to GAIL and will ship 2 million tonnes of LNG in 2021. A company official said on the sidelines of the conference that supplies would rise to 2.5 million tonnes in 2022 and 2.85 million tonnes in 2023.
Mr. Jain said that Gazprom had informed GAIL that it was facing issues in procuring gas and had asked to reschedule a liquified natural gas (LNG) cargo, which the Russian company could supply the committed volumes from its portfolio of assets.
GAIL's imports of natural gas could increase by 5–6% in this fiscal year to March 2023, Mr. Jain said, adding that he expected prices of LNG to be high for the next 12–18 months.
Asian spot LNG prices have fallen about 50% from an all-time high in December but are up nearly three-fold from levels seen in May 2021 as prices have rallied on tight global supplies.