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Indian LNG buyers issue force majeure notices
PERFORMANCE
INDIA’S decision to impose a 21-day lockdown this week has reportedly driven the country’s liq- uefied natural gas (LNG) importers to issue force majeure notices to their suppliers.
India Prime Minister Narendra Modi ordered a complete lockdown on March 25 in a bid to control the spread of the coronavirus (COVID- 19). The move led more than half a dozen Indian ports to declare force majeure which, in turn, has forced Petronet LNG, GAIL (India) and Guja- rat State Petroleum Corp. (GSPC) to follow suit, according to Reuters’ sources.
The newswire quoted unnamed sources as saying that Petronet LNG was looking to delay deliveries from Qatargas, while GSPC had also issued force majeure notices to suppliers.
“Gas demand has reduced drastically and it is likely to go down further,” a source at state-run gas utility GAIL said. They added: “Only fertil- iser, power and refineries are running at parcel loads. Other local buyers have already issued force majeure, so where should we sell LNG?”
The GAIL insider, speaking to Reuters, added that the company had already served force majeure notice to some of its suppliers and was preparing to notify the remainder.
A source at GSPC said the company had received force majeure notices from most of its customers, adding: “Industries like chemical, textile and ceramics that do not qualify under categoryofessentialcommoditiesareclosing.”
Another source said that with demand down and LNG storage tanks almost full, cargoes meant for India could soon be diverted to China. The source said: “Transport segment is already down 10% and retail gas is down to 10% of normal vol- umes, industrial output has been impacted.”
LNG stockpiling could even force state run Oil and Natural Gas Corp (ONGC) to curb its production, company chairman Shashi Shanker told the newswire. “As of now there is no impact on the production of oil and gas, but in the coming days gas production might get affected because of less off-take in view of the decrease in domestic demand,” he said.™
Pakistan’s falling fuel demand could hit upstream operators
PERFORMANCE
THE coronavirus (COVID-19) pandemic is reportedly depressing Pakistan’s fuel demand to the point where the country’s upstream may have to trim its production of crude oil.
Pakistani financial daily quoted unnamed industry sources on March 23 as saying that oil marketing companies’ (OMCs) sales in March had started falling.
While official figures are not available yet, the daily quoted sources as saying that transportation, power generation, aviation and industrial fuel demand was slowing in response to ongoing social distancing efforts and was likely to worsen as the government introduces more drastic measures.
Refiners, meanwhile, are likely to see their margins squeezed from the slowdown, one market source said. Operators are already under pressure, having to process crude inventories that have been severely devalued by the recent price crash.
Attock Refinery Ltd (ARL), which has a current nameplate capacity of 53,400 bar- rels per day, said on March 19 that it would close its second 5,000 bpd crude distillation unit (CDU) owing to reduced OMC offtake volumes. The refiner, which said high-speed diesel (HSD) stockpiles had reached “critically high” levels and storage was quickly running out, processes locally produced crude oil. It
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