India’s coronavirus lockdown hits LNG demand and port activity

Joachim Moxon


India’s coronavirus lockdown hits demand and port activity

SINGAPORE (ICIS)–Fresh reports of force majeure were heard from India, as the country entered a 21-day lockdown this week to stem the spread of coronavirus in the country.

Several ports in the state of Gujarat, including Mundra and Hazira and possibly also Dahej, have issued force majeure notices, market source said. As such, the ports have declared non-liability for any delays in port activity of whatsoever nature, freeing them of any demurrage charges.

This has made it easier for LNG importers, like Petronet LNG Ltd and Gujarat State Petroleum Corp (GSPC) to issue to similar notices to their suppliers, sources said.


Petronet LNG was reported to have declared force majeure on contractual supplies from Qatargas and ExxonMobil, though some Indian-based sources said the buyer could be seeking to reschedule deliveries rather than cancel outright.

The company has deferred at least one delivery that was scheduled for March, trade sources said, while the delivery schedule for April is also expected to be rearranged.

As a knock-on effect, market sources said Qatargas was offering ten spot cargoes for delivery to Asia, likely as a result of the supplier needing to find alternative destinations for rescheduled volumes.

Gujarat State Petroleum Corp (GSPC) were also heard seeking deferrals, and may have cancelled a seven-cargo tender for delivery from May 2020 to March 2021.

No one wants to lock in requirements at this point, a trader from an Indian company said.


Shipping sources said a cargo from Abu Dhabi on the 137,000cbm Ghasha was impacted by the recent developments.

The vessel was scheduled to arrive to Dahej on 4 April, but the owners have now been notified of potential discharge delays, the shipping sources said.

It was not clear to what extent operations will continue at ports under force majeure. Adani Ports said in its notice regarding Mundra that port services were considered essential and that it would whole-heartedly endeavour to continue port operations to protect the supply chain of industries.


In neighbouring Pakistan, a source said importer Pakistan State Oil (PSO) had discussed the possibility of force majeure on its contract with Qatargas, but had not taken the step at this point.

The company is working with the supplier to allow prolonged discharge and some cargoes will probably be rescheduled, the source said.

The country’s other importer, Pakistan LNG, is also facing delayed discharge on its next cargo, but the situation may improve as well, the source added.

Unlike India, Pakistan is only on partial lockdown, with measures still relatively light in the capital of Islamabad.

However, there is a serious lockdown in the port city of Karachi, making movement of terminal staff difficult, the source said. It remains to be seen if the ports of Karachi and Qasim will take similar action as the ports in India, he added.

In Bangladesh, where a lockdown has been imposed to 4 April, a source said terminal operations were still running as normal. Domestic gas production can be reduced if demand takes a hit, the source said.


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