Clean petroleum product discharge delays into Egypt on payment term woes
There are extended waiting times for vessels wanting to discharge clean petroleum products, including 0.2% gasoil, at the Egyptian General Petroleum Corporation held ports of Alexandria and Suez, Platts reports. This is due to delays in acquiring appropriate payment terms, market sources said Tuesday. "Never so long and never so many...we have been waiting 10 days and that's the longest I have ever had to wait for an LC after arriving, there are seven other vessels stuck there," one cargo trader said of the situation at the port of Alexandria.
A source close to EGPC confirmed that there was a delay in issuing letters of credit for some of the vessels waiting to discharge at the port of Alexandria and Suez into Egypt.
"Yes, some vessels are delayed...the situation is critical in Egypt, sometimes when it is critical like this it can take some time...because we can't open a letter of credit on time," the source said.
The source said that it was unknown how long the situation could take to resolve itself, however there was confidence that it would be resolved and that a substantial new gasoil buy tender for the third quarter would go ahead.
Shipping sources confirmed that when waiting to discharge into Egypt they have had to wait from around five days to 14 days for "financial clearance" in previous similar situations.
EGPC issued two tenders last week, one for delivery of max 0.2% grade gasoil into the ports of Alexandria and El Dekheila, according to a tender document seen by Platts, and a second for delivery of 0.1% grade into Suez, trading sources said. The tender totaled 36 cargoes for delivery July through till September.
After the overthrow of President Hosni Mubarak in early 2011, Egypt has continued to work for political and economic stability. The country's first free presidential election is due to take place Wednesday to replace the interim military government.