Business
* MRPL may get 2-3 cargoes of Iran oil in Aug
* MRPL booked Indian vessel with Mercator -shipping source
* Vessel has local insurance cover, source says
By Nidhi Verma
NEW DELHI, Aug 10 (Reuters) - India's Mangalore Refinery andPetrochemicals Ltd. may lift about 2 million barrelsof crude from Iran in August, it said, and a shipping sourcesaid the company has booked its first vessel with localinsurance cover to transport the oil.
MRPL imported one cargo of around 660,000 barrels from Iranin July. The August figure is still just a little over half ofthe 3.7 million barrels India's top buyer of Iranian oil used toimport on average every month in the fiscal year that ended onMarch 31.
India, like all other major Asian buyers of Iranian oil, is working around an European Union embargo that bars underwritersfrom providing insurance to ships carrying it. The EU ban thatcame into effect from July 1, combined with U.S. sanctions, hashalved the Islamic Republic's exports.
India, the second-biggest customer for Iranian crude afterChina, is keeping oil from the OPEC member flowing in by askingIran to take on all the risk. It is also asking Indian state-runinsurers to provide cover to locally owned ships.
Neither approach has been entirely successful yet becausethe cover for local ships is limited at just $100 million, whileIran does not have enough tankers that can use Indian ports,reducing MRPL's ability to continue with steady shipments.
"This month, I will be getting two to three cargoes," MRPLManaging Director P. P. Upadhya told Reuters on Friday.
Japan, the only other main consumer which has agreed toprovide federal insurance on ships carrying Iranian oil, isproviding cover of up to $7.6 billion.
Upadhya said MRPL's imports from Iran could rise once itssingle point mooring (SPM) is commissioned later this month orearly September, enabling it to import oil in bigger vessels.
MRPL, which bought around a third of India's total 362,000barrels per day (bpd) from Iran last fiscal year, had alreadycut import plans for this year by 20 percent to 100,000 bpd to help New Delhi secure a waiver from U.S. sanctions on Iran'snuclear programme.
CUTTING IMPORTS
The sanctions are aimed at cutting Iran's oil revenues andforcing it to curb a nuclear programme the West believes will beused to develop weapons, which Iran denies.
MRPL has already received 93,000 tonnes, or about 680,000barrels, for August in an Iranian vessel Gardenia, Upadhya said.
In July, MRPL received only a fifth of an initially planned3.3 million barrels of oil from Iran, importing the crude in theIranian suezmax tanker Magnolia as domestic shippers were notwilling to make the journey with reduced insurance cover.
Only Mercator Ltd offered its Omvati Prem aframaxin a shipping ministry tender seeking vessels to import Iranianoil for MRPL. The ship was built in 1994, according to thecompany's website. It is scheduled to lift a cargo on Aug. 15,the first to do so using the limited Indian cover.
"I may ask Mercator to lift one more cargo for us thismonth," Upadhya said.
"Omvati Prem is the only vessel that Mercator can provide asit is open and is availing insurance from United India Insurancefor Iran voyage," said a shipping source with knowledge of thedeal who added that MRPL had booked the vessel.
State-run United India Insurance Co is providing $50 millioneach per voyage against pollution and personal injury claims,also known as protection and indemnity (P&I) insurance, and forhull and machinery to protect ships against physical damage.
The cover is re-insured by General Insurance Co.
