Petronet says Qatargas, Exxon objected to force majeure on LNG imports
India’s top gas importer Petronet LNG said suppliers Qatargas and Exxon Mobil Corp objected to the force majeure it invoked in March after local demand slumped because of lockdowns to stem the spread of COVID-19.
Petronet has a deal to buy 7.5 million tons per year (MMtpy) of LNG from Qatar and 1.44 mtpa from Exxon’s Gorgon project in Australia.
Petronet invoked the force majeure on eight LNG cargoes of Qatar and one from Exxon for loading from March to May, its head of finance V.K. Mishra told an analyst conference.
Force majeure is a clause in commercial contracts allowing companies to not fulfill contracts because of event outside their control.
“They have objected to this force majeure, we are trying to convince them and hopefully we will work out a solution because as per contract this is admissible,” Mishra said.
“They have objected to it but they have not given any reason why this is not a force majeure.”
Exxon Mobil and Qatargas did not immediately reply to emails from Reuters requesting comment on their objections to the force majeure.
Mishra also said Petronet is in talks with Qatargas to renegotiate gas pricing under its long-term deals as spot prices have declined.
Indian gas demand has recovered now and the company’s Dahej LNG terminal, which can bring in 17.5 mtpa, is now operating at about 100% capacity, Mishra said.
He hoped the Dahej terminal will continue to fully operate for the remainder of the fiscal year to March 2021, while capacity use at the 5-mtpa Kochi terminal will improve after a key pipeline linking customers is ready this year.
Petronet’s non-binding memorandum of understanding to buy a stake in Tellurian Inc’s Driftwood LNG project expired in May, Mishra said, adding his firm may renew the pact.
Reporting by Nidhi Verma; Editing by Christian Schmollinger
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