Indian ports finding way forward in face of lockdown

India entered a 21-day lockdown last week to stem the spread of coronavirus in the country. As a result, it has been reported that several ports in the state of Gujarat, (including Mundra and Hazira and possibly also Dahej), have issued force majeure notices.

As such, the ports have declared non-liability for any delays in port activity, freeing them of any demurrage charges. This will make it easier for LNG importers, (such as Petronet LNG Ltd and Gujarat State Petroleum Corp), to issue to similar notices to their suppliers.

Petronet LNG is said to have declared force majeure on contractual supplies from Qatargas and ExxonMobil, though some Indian-based sources said the buyer might be seeking to reschedule deliveries rather than cancel outright. This is unconfirmed, but trade sources said the company has deferred at least one delivery that was scheduled for March, while the delivery schedule for April will also probably 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 were also heard seeking deferrals, and may have cancelled a seven-cargo tender for delivery from May 2020 to March 2021.

It is currently 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 yet. 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. It remains to be seen if the ports of Karachi and Qasim will take similar action as the ports in India. In Bangladesh, where a lockdown has been imposed until April 4, terminal operations are said to still be running as normal.

For more information visit www.petronetlng.com

30th March 2020