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Russian gas company Novatek is open to accepting payments in Indian rupees for any LNG term deal it signs with Indian gas entities, its chairman Leonid Mikhelson said on the sidelines of the Indian Energy Week on Feb. 6.
Novatek is in talks with state-owned gas utility GAIL and other Indian companies for LNG term deals at a time when Russia’s pipeline gas supply to Europe is in decline due to its war with Ukraine, and Moscow is seeking inroads into Asian markets.
“We won’t be able to provide ships for supplies to India,” Mikhelson said. He said Indian LNG importers will need to arrange their own cargoes for LNG consignments and the payment received in rupees would be used by Novatek to invest in engineering companies in India.
“We have engineering companies present in India, we need to expand and grow in that part,” he said.
A spate of Western sanctions has limited the ability of Russian oil and gas exporters to trade in currencies like the US dollar and narrowed the number of banking channels available to send revenues back to Russia.
Mikhelson said LNG production at the Yamal LNG plant would be 5% lower in 2023 compared with 2022 levels due to delays in maintenance. Novatek has supplied 33 LNG cargoes so far to Indian companies since 2018, he added.
European buyers continued to be interested in Russian LNG supplies despite sanctions and no European buyers wanted to terminate their term deals with Russia despite the conflict with Ukraine, he added.
In spite of sanctions, overall Russian LNG exports actually rose year-on-year in 2022, with roughly volumes flowing to Asia and Europe, according to seaborne trade data. In fact, LNG exports to Europe actually rose from 2021 levels and on an individual country basis, Japan was the single largest importer of Russian LNG followed closely by China, France, Spain and Belgium.
