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By Krishna N. Das and Nidhi Verma
- India not keen to buy LNG subject to sanctions despite talks, say sources
- Tanker carrying unauthorised LNG diverted after talks falter, says source
- India conveyed decision to Russian deputy energy minister – source
NEW DELHI, May 11 (Reuters) – India has declined Russia’s offer to sell it liquefied natural gas subject to U.S. sanctions despite a shortfall driven by Middle East tensions, said two sources with direct knowledge of the matter, leaving a tanker bound for India in limbo as talks continue on permitted cargoes.
The stance highlights the fine balance the world’s third-biggest oil importer and consumer is seeking to strike between securing energy supplies and avoiding LNG cargoes on which the U.S. has placed sanctions, which are harder to disguise and carry greater compliance risk. It also underscores the limits of Moscow’s ability to pivot its LNG exports to new markets.
India’s reluctance has left an LNG cargo from Russia’s U.S.-sanctioned Portovaya plant in the Baltic Sea unable to discharge, despite indicating India as its destination in mid-April, one of the sources said. The vessel was tracked despite documentation suggesting the cargo was non-Russian, the source added.
Reuters had reported in mid-April, citing LSEG shipping data, that the 138,200-cubic-metre tanker Kunpeng was heading to the Dahej LNG import terminal in western India. The vessel is now near Singaporean waters with no destination broadcast, according to LSEG.
India, the biggest buyer of Russian seaborne crude, conveyed its decision not to buy LNG that was under sanction to Russia’s Deputy Energy Minister Pavel Sorokin during his April 30 visit, when he met Indian officials including Petroleum and Natural Gas Minister Hardeep Singh Puri, one of the sources said. It was their second meeting in as many months, and Sorokin could return in June for further talks, said the source.
India’s Oil and Gas Ministry and Russia’s embassy in Delhi did not immediately respond to requests for comment.
‘RUSSIA KEEN TO SELL, INDIAN COMPANIES CAUTIOUS’
India’s purchases of Russian crude have meanwhile continued unabated, aided by a temporary waiver of U.S. sanctions introduced to help countries cope with an energy crisis resulting from the U.S.-Israeli war on Iran, which began on February 28.
Arctic LNG 2 is Russia’s other export plant subject to U.S. sanctions. Washington stepped up sanctions on the LNG plants in early 2025 over Russia’s war on Ukraine.
While crude oil cargoes can be hidden through ship-to-ship transfers at sea, LNG shipments are far harder to conceal from satellite tracking, one of the sources said.
India is open to buying authorised Russian LNG, but most of those volumes are committed to Europe, the source said. The source said China remains a major buyer of both sanctioned and unsanctioned Russian LNG.
Moscow is also seeking long-term deals to supply India with LNG and fertilisers such as potash, phosphorus and urea, the source added.
Before the Iran conflict disrupted shipping through the Strait of Hormuz, India was meeting half of its gas consumption through imports, about 60% of which had come through the waterway. More than half of its crude supplies came the same way.
Indian Prime Minister Narendra Modi on Sunday urged people to conserve fuel and foreign exchange by working from home, limiting foreign travel and reducing imports of gold and edible oil.
Reporting by Krishna N. Das and Nidhi Verma in New Delhi; Editing by Kevin Liffey
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