NEW DELHI: GAIL has urged the government to use its diplomatic ties with the US to help rework the company’s expensive gas purchase deals with the American suppliers at a time the liquefied natural gas (LNG) rates in the spot markets have fallen to record lows, according to people familiar with the matter. GAIL has contracts for the purchase of 5.8 million tonnes a year of liquefied natural gas (LNG) with two US suppliers, deals that were signed between 2011 and 2014 as LNG prices roared across the world. A global price reversal since leading to a recent collapse in the spot market has made it harder for GAIL to market the expensive US gas. GAIL has written in a recent letter to the government that the US suppliers should consider aligning contract prices with current market realities and reduce annual volumes, according to the people familiar with the matter. GAIL wants the total supplies for the contracted 20 year-term to be stretched over 25 years, the person saidGAIL is banking on strengthening ties between India and the US, and hopes a government-to-government dialogue could get private US suppliers to the negotiating table, he said.“GAIL is contract-bound to buy US LNG but if it can’t further sell this to customers, how long can it keep buying and paying for US LNG. The US suppliers should understand this,” said the person. The rate for US LNG brought to Indian shores is about thrice that of the one bought in the spot market these days. Spot rates for India delivery have dived to $2 per million metric British thermal unit (mmBtu) and a global supply glut is expected to keep rates low for long. GAIL’s costs mainly include Henry Hub gas price, liquefaction and transport costs and the company primarily wants modification in liquefaction rates, which are about $3 per mmBtu, according to people cited above. GAIL has tried in the past to renegotiate LNG deals but was always faced with unyielding US suppliers. By contrast, it has been able to rework its contract with Russia’s state-run Gazprom. Petronet LNG, India’s largest gas importer, too has successfully renegotiated with ExxonMobil and Qatar for long-term LNG supplies.