Confidence Petroleum Secures First LPG Cargo Under Revised Supply Arrangement
Confidence Petroleum Limited, India’s largest private liquefied petroleum gas (LPG) bottler, has received its first LPG cargo under a revised supply arrangement aimed at avoiding disruptions caused by the ongoing Iran-US conflict in West Asia. The company’s 46,000 MT LPG consignment reached the mouth of the Strait of Hormuz last week, marking the first delivery under a new logistics model adopted after the latest escalation in the conflict.
The shipment was brought to Sohar port in Oman by Abu Dhabi National Oil Company (ADNOC), from where ship-to-ship transfer operations to Confidence Petroleum’s vessel are underway. Confidence chairman Nitin Khara confirmed the development to TOI. Sources said the cargo is expected to be transferred completely by Tuesday evening.
ADNOC Facilitates Safe Movement of Cargo
Industry sources said ADNOC is better positioned to navigate regional security situations and facilitate safe movement of cargo through the Strait. The arrangement comes at a cost, with time-charter freight rates estimated to be nearly four times higher on a per-day basis. The responsibility for transporting and safeguarding the cargo within the Strait remains with the supplier.
Tensions in the region have significantly slowed shipping activity. While vessels typically take a couple of days to travel from the Gulf to Sohar after crossing the Strait of Hormuz, ADNOC took nearly 12 days to deliver Confidence’s cargo due to heightened security concerns and the risk of attacks, sources said. A public sector oil company also received a shipment through a similar arrangement last week.
Challenges in Sourcing Fresh LPG Cargoes
Despite the new delivery mechanism, sourcing fresh LPG cargoes remains challenging. Following the initial disruption caused by the conflict, Confidence had turned to the United States for supplies, marking its first-ever LPG buy from the country. However, recent restrictions affecting movement through the Suez Canal have further complicated logistics.
Ships carrying LPG from the US are now being routed around Africa, nearly doubling transit time to India, according to industry sources. Confidence typically replenishes its LPG inventory every month. Public sector oil companies, however, require more frequent replenishment cycles, making them more vulnerable to supply disruptions. Industry sources said the renewed conflict in the Gulf has once again slowed the flow of LPG cargoes into the country.
Original Article: Confidence takes LPG out of the dire Strait — Indiatimes