LNG vessels diverted from India as Covid hits demand

At least five LNG vessels heading to India have been diverted or are delaying their arrival in the country as a surge in Covid-19 cases slashes demand for the fuel.

Two LNG vessels that were originally meant to unload their cargoes in India this month have been diverted to other destinations. And at least three other India-bound vessels have either slowed their speeds or paused their journeys, according to vessel tracking data from analytics firm Vortexa.

More India-bound vessels are likely to be turned away in the coming weeks, market participants said, as the country's coronavirus outbreak showing no signs of abating.

The 160,276m³ Cubal loaded at Angola LNG's 5.2mn t/yr Soyo LNG facility on 12 April and was scheduled to arrive at the 17.5mn t/yr Dahej terminal in the western state of Gujarat on 30 April. But the vessel signaled a change in destination on 29 April, to China's Fujian province, where it is now expected to arrive on 9 May.

The 180,000m³ Gail Bhuwan was due to deliver a US LNG cargo to Dahej, which is operated by state-controlled Petronet, on 22 April. But the vessel is now heading to Kuwait's 5.7mn t/yr Mina al-Ahmadi LNG terminal, where it is estimated to arrive on 1 May.

State-controlled gas distributor Gail was meant to take receipt of the cargo, which loaded at the 5.75mn t/yr Cove Point LNG facility in the US on 24 March. But Gail issued a tender on 15 April to sell the cargo, specifying various possible destinations including south Asia, the Middle East, Singapore, Brazil and Argentina, and Europe. The tender was awarded to Shell Trading, market participants said.

The 174,000m³ Gaslog Greece vessel was due to head to India after loading a cargo at the 3.7mn t/yr Punta Europa terminal in Equatorial Guinea on 1 April. It arrived offshore India's west coast on 25 April but has been circling the area ever since.

The 137,540m³ Ish is scheduled to arrive at Dahej on 2 May after loading at Abu Dhabi's 5.6mn t/yr Das Island LNG facility on 14 April. But its speed fell from 17 knots (31km/h) on 15 April to just 5 knots on 20 April, when it was near the Khor Fakkan anchorage Abu Dhabi. It then gradually picked up speed and is currently off India's west coast travelling at 9 knots. The seller has been in talks with various buyers in the last few days to divert the cargo but the outcome of those discussions is unclear, market participants said.

The 137,000m³ Mubaraz loaded at Das Island on 21 April and is scheduled to deliver its cargo to Dahej on 6 May. But the vessel was floating in the Mideast Gulf from 21-28 April.

Covid curbs hit demand

The diversions, slowdowns and idling of vessels reflect high stock levels at Indian terminals as Covid-19 restrictions and lockdowns hit India's LNG consumption, market participants said. Stock levels at Dahej are close to 90pc of capacity, compared to around 60-70pc a month earlier, one India-based trader said.

Measures to curb India's Covid-19 outbreak have hampered gas demand from the industrial sector, even as factories and industries remain allowed to operate. Some manufacturing and industrial plants have been hit by falls of up to 50pc in their labour force because of Covid-19, resulting in a slowdown in processes and gas consumption, market participants said.

Gas demand from city gas firms and refineries has fallen by around 10-20pc and 5pc respectively since the second wave of Covid-19 cases began, the India-based trader estimated. And LNG demand could take a further hit if the restrictions and lockdowns are extended further, he said.

India reported a record 386,000 new cases across the country yesterday, taking its total case count to 18.7mn. The government has already extended a lockdown in Maharashtra state, which began on 14 April, to 15 May from 1 May previously as it struggles to contain a sharp surge in Covid-19 infections. Maharashtra is one of the most badly hit states in the country, recording 66,159 new Covid-19 cases and 771 deaths on 29 April alone.

A slew of regulations and restrictions have been imposed at terminals in India on the back of the surge in Covid-19 cases. Visitors to vessels at Dahej must undergo a RT–PCR real-time detection test for Covid-19, as well as produce evidence they are not infected by the virus.

Dahej received 17 cargoes in April, compared to 22 in each of March and February. It last received a cargo on 28 April from the 136,026m³ Raahi, which loaded at the 77mn t/yr Ras Laffan facility in Qatar on 23 April, Vortexa data show.

By Joey Chua