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ENEOS cancels Cepsa naphtha purchase after Hafnia Nile incident

Japan’s ENEOS canceled a 55,000-metric ton naphtha cargo purchase from Spain’s Cepsa after the LR1 Hafnia Nile hit the VLCC Ceres I July 19, several sources familiar with the matter said Sept. 12.

“The deal was canceled because it was not possible for the cargo to be delivered on time and some of the volume had also been lost in the accident,” a trading source tracking the deal said on the sidelines of S&P Global Commodity Insights’ Asia Pacific Petroleum Conference, or APPEC, in Singapore.

Another source said the deal was on a DAP basis and therefore Cepsa was responsible for handing over the cargo at Japan’s Kashima port. Several sources familiar with the matter said the Japanese refiner and trader ENEOS arranged a separate cargo from another seller to meet its requirement.

The Hafnia Nile completed the transfer of less than 50,000 metric tons of Cepsa’s naphtha cargo to LR1 Hafnia Guangzhou in Malaysia, but part of the cargo had been burnt, Commodity Insights reported Sept. 2.

Until now there had been no confirmation on the fate of the deal or whether any replacement cargo was provided. Cepsa declined to divulge details about the cargo volume and its buyer in response to queries from Commodity Insights in July and August.

Almost two months after the accident, the Ceres I is still anchored near Sedili in Malaysia’s Johor province as of Sept. 12 and is undergoing repairs, trading sources tracking the ship said.

The Ceres I, operated by China’s Shanghai Prosperity Ship Management, had previously carried Iranian crude, which is subject to US sanctions, according to S&P Global Commodities at Sea. The company could not be immediately reached for comment.

The Singapore-flagged Hafnia Nile has protection and indemnity cover from Gard. The Ceres I has hull and machinery insurance from Maritime Mutual. Gard and Maritime Mutual are yet to reply to a request for comment.

Singapore-based shipping conglomerate BW Group has a stake in Hafnia, which operates the world’s largest fleet of LR1 tankers. Hafnia was listed on the New York Stock Exchange around five months ago and continues to trade on the Oslo Stock Exchange. It operates more than 100 tankers.

Asian LR1 tanker freight rates are recovering from year-to-date lows hit in August, Commodity Insights data showed, amid tight supply of LRs for loading during rest of September according to market participants.

Daily earnings on a round-trip basis for LR1s on the benchmark Persian Gulf-Japan route are close to $20,000/d compared with $15,000/d around 10 days ago, according to brokers’ estimates.
Source: Platts

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