Formosa asks suppliers to defer crude imports, plans to delay exports, boost safety checks

29-Jul-10

Taiwan’s Formosa Petrochemicals Corp imports an average of 7-8 Very Large Crude Carriers (VLCCs) a month, each carrying 2 mln barrels of crude. About 90% of the crude is imported through term contracts with major Gulf producers except Oman and Qatar. Formosa is in talks with suppliers to defer crude import parcels. The Taiwanese major plans to defer several export cargoes of gasoline and diesel from end-August as it plans to ramp up review of safety at its plants after two fires at its facilities. Formosa exports 210,000-240,000 tons/month of term and spot gasoline cargoes for which it has contracts with trading firms and Vietnam's state oil importer Petrolimex, as per Reuters. Formosa exports 800,000 tons/month, of diesel. The export cargoes could be delayed for a few days to over several days. The company is trying to supply to customers who have already chartered vessels to lift the cargoes. Formosa is in talks with suppliers to delay the arrival of several crude oil import cargoes, or to waive delivery of few supplies. Since it is not company policy to declare force majeure on supplies, the company awaits agreement from its suppliers. A force majeure exempts the contracting parties from fulfilling their contractual obligations for causes that could not be anticipated or are beyond their control.