NYREADERS.COM - Indian state-controlled gas distributor Gail said it will issue more LNG tenders to swap US term cargoes with supplies closer to India for the next few months, as long as tensions in the Red Sea persist.

India's US LNG imports have declined as cargoes have faced difficulty in transiting via the Suez Canal.

Gail has sold LNG cargoes sourced from Cheniere Energy's terminal in the Gulf of Mexico to an unnamed highest bidder in Europe, Gail's director of marketing Sanjay Kumar told Argus Media on the sidelines of the India Energy Week in Goa on 9 February.

Cheniere Energy, Inc. is the leading producer and exporter of LNG in the United States, reliably providing a clean, secure, and affordable solution to the growing global need for natural gas.

Gail used the proceeds from the sale to source spot cargoes from Gulf countries — shipments that do not have to transit through the Suez Canal to reach India.

Conflict in the Red Sea since December 2023 has disrupted shipping operations as tankers heading to India have been taking the longer route around the Cape of Good Hope. More recently, Houthi rebels in Yemen launched attacks on cargo carriers, worsening the situation.

An inability to take the shorter Suez Canal route adds up to seven days in delays for Gail's US LNG shipments to reach the 17.5mn t/yr Dahej LNG import terminal on the west coast of India, Kumar said.

Gail expects the conflict to last at least another few months.

Gail was forced to consider selling LNG cargoes sourced from the US to other buyers, particularly Europe after three vessels that delivered cargoes to Gail from the US in January returned via the longer route instead of using the Suez Canal. (*)