GAIL Claims $1.8 Billion in Arbitration Over Unfulfilled LNG Agreement With Ex-Gazprom Unit
GAIL Claims $1.8 Billion in Arbitration Over Unfulfilled LNG Agreement With Ex-Gazprom Unit
GAIL (India) Ltd., a state-owned entity, has filed an arbitration claim against SEFE Marketing & Trading Singapore, a company formerly affiliated with Russian gas giant Gazprom, seeking $1.8 billion in compensation for the non-delivery of liquefied natural gas cargoes.
GAIL announced in a filing with the Bombay Stock Exchange (BSE) that it has filed a claim against SEFE Marketing & Trading Singapore in the London Court of International Arbitration (LCIA) on November 30, 2023. The dispute relates to the non-supply of liquefied natural gas (LNG) cargoes to GAIL under a long-term contract. GAIL seeks compensation of up to $1.817 billion and other remedies, including non-monetary ones.
GAIL signed a 20-year agreement with Gazprom in 2012 to purchase 2.85 million metric tons of liquefied natural gas (LNG). Deliveries began six years later and were scheduled to reach full capacity in 2023.
Gazprom Marketing and Trading Singapore (GMTS) initially acted as the signatory on behalf of Gazprom for the LNG supply agreement. However, in early April 2022, Gazprom divested ownership of GMTS, transferring it to Gazprom Germania (now known as SEFE). After this transfer, SEFE defaulted on its obligations to deliver LNG to India under the agreement.
Following Western sanctions imposed on Russia for its invasion of Ukraine on February 24, 2022, invoking a force majeure clause, LNG supplies to GAIL ceased from June 2022. The deliveries resumed this April by SEFE.
