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The outlook for liquefied natural gas (LNG) deteriorated on Monday, as the coronavirus continued to impact deliveries to China following a week in which the country’s largest importer declared force majeure and sent a bearish signal to an already oversupplied global market.
Ship brokerage and consultancy Poten and Partners said as many as 35 February cargoes could be subject to force majeure, with at least five already diverted. China National Offshore Oil Corp. (CNOOC) declared force majeure last week because of the virus and impacts to downstream demand. State-owned PetroChina and China Petroleum and Chemical Corp., aka Sinopec, had not yet declared force majeure but along with other importers in the country were first aiming to delay or divert cargoes set to arrive through April, Poten said.
According to ClipperData, there were two LNG cargoes floating near China on Monday, while another was near Malaysia. In another sign of disruption, Bloomberg reported that nine vessels were floating throughout Asia, citing data intelligence firm Kpler.
Total SA and Royal Dutch Shell plc rejected CNOOC’s force majeure, claiming the company doesn’t have cause. Other suppliers and trading houses have reportedly received notice from CNOOC.