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GAIL to receive first cargo from SEFE- a former Gazprom subsidiary under a long term contract

India’s GAIL is all set to receive first cargo from SEFE (formerly Gazprom Germania) in mid-October under a long-term contract. After a long negotiations and threat for a legal action by GAIL India, the German state-owned SEFE has swung into action.     

The state-owned Securing Energy for Europe GmbH (SEFE) plans to start using Russian LNG once again for the first time since the beginning of last year’s energy crisis. SEFE plans to receive an LNG shipment from the Yamal liquefaction plant in Siberia on October 1st, according to Bloomberg.

SEFE’s tanker, the Amur River, will pick up the cargo in Zeebrugge, Belgium, and then transport it to India.
GAIL India had entered a 20-year supply contract with Gazprom Marketing and Trading Singapore (GMTS) in 2012 for annual purchases of an average of 2.5 million tonnes of LNG on a delivered basis. At the time, GMTS was a unit of Gazprom Germania, which is now renamed as SEFE, but the Russian parent gave up ownership of SEFE after Western sanctions.

The initial contract with GMTS was also for supplies from the Yamal project in the Arctic. After the nationalization of SEFE by the federal government, Moscow imposed sanctions on the company, blocking its access to Russian LNG, including from Yamal. However, in June, Russia eased this ban.
SEFE lifting Russian cargo also contradicts the German federal government’s goal of reducing dependence on Russian supplies.

Berlin had previously strongly opposed the import of Russian LNG, emphasizing that it did not support the purchase of Russian liquefied gas - as stated in a January document from the Ministry of Economy, which oversees SEFE.
Although the EU has imposed extensive sanctions on the Kremlin following Russia’s invasion of Ukraine, it still allows the import of Russian LNG.