UPDATE 1-India Shipping Corp seeks local insurance cover for Iran imports
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NEW DELHI, March 14 (Reuters) - Shipping Corp of India , the country's largest shipping company, is in talks with local insurance firms seeking cover for cargoes and vessels for imports from Iran, its chairman S. Hajara said on Wednesday, as fresh western sanctions loom.
"We haven't heard from the government. We are talking to PSU (state-run) insurance companies. They (talks) are positive discussions," Hajara told Reuters on the sidelines of a coal industry conference.
The European Union announced new sanctions in January which will mean a total ban on European insurers indemnifying ships that carry Iranian crude and oil products -- either on term or spot basis -- from July.
But Shipping Corp was forced to cancel an Iranian crude oil shipment last month because its European insurers refused to cover the spot deal, struck after Jan. 23 when the EU announced the plan for sanctions on the OPEC member.
Europe and the United States are enforcing tougher economic sanctions in the hope of isolating Iran and forcing it to halt its nuclear programme, which the West fears will be used to develop nuclear weapons.
Iran, the biggest producer in OPEC after Saudi Arabia and the world's fifth largest oil exporter, says its nuclear programme is purely for peaceful purposes.
Iran is India's second-biggest supplier of oil after Saudi Arabia, with some $11 billion a year in shipments meeting about 12 percent of India's crude import needs.
Indian shipping firms will find it difficult to obtain replacement insurance coverage to continue importing Iranian crude oil after the new European Union sanctions come into effect, sources have said.
India is weighing up options including extending sovereign guarantees for its shipping lines and buying Iran oil on a delivered basis, former Shipping Secretary K Mohandas said last month.
"July is a long time away, we hope something will happen before that," Hajara said, adding his firm was in talks with the the EU P&I club for ways to continue insurance for Iran cover.
He said Shipping Corp may look at getting insurance coverage from P&I clubs which are not affected by the sanctions. China, Hong Kong and Japan all have insurance arrangements for trade with Iran. (Reporting by Krittivas Mukherjee and Ratnajyoti Dutta; Writing by Nidhi Verma; Editing by Jo Winterbottom)
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