India’s Petronet LNG invoked force majeure on 9 cargoes

India’s Petronet LNG said Tuesday it invoked a force majeure for nine long-term cargoes with its suppliers due to lower demand in the country caused by the Covid-19 lockdown.

The country’s largest LNG importer has a deal to buy 7 mtpa from Qatargas and 1.44 mtpa from Exxon Mobil from the Gorgon project in Australia.

The regasifed volumes go to Indian state-owned buyers Gail, IOC and Bharat Petroleum (BPCL).

Petronet did not break down the shipments by supplier in a filling but local media reports suggest that 8 of these were Qatari cargoes.

The nine shipments were for delivery in the March-May period.

India imposed a nationwide lockdown from the last week of March to stop the spread of the coronavirus.

This affected many industries, refineries and power plants resulting in a demand reduction at Petronet’s 17.5 mtpa Dahej terminal, it said in the filling.

Before Covid-19, Dahej operated at about 92 percent of capacity while in April the utilization fell below 60 percent, Petronet said.

The company’s underused 5 mtpa Kochi LNG terminal has also seen a drop in utilization from about 20 percent in February to 12.22 percent in May.

“Post first week of June 20 when the lockdown was relaxed, the demand of RLNG has seen gradual recovery,” the company said, adding that since then, the Dahej terminal is operating at its full capacity.

“Owing to the pandemic and consequent reduced RLNG demand during the lockdown period, Petronet LNG was constrained to invoke force majeure for nine long-term cargoes with its suppliers,” it said.

Furthermore, Petronet said it was still in talks with Qatargas and Exxon Mobil regarding the matter.

The Indian company said it also received requests under its regasification contracts for deferment of third-party cargoes to subsequent months.

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