BP Shipping Unit Adds Radiation Clause To Contracts

(Dow Jones) – BP PLC (BP, BP.LN) has confirmed that its shipping unit has added a “radiation clause” to its contracts since last month, to give its vessels more operational flexibility when approaching Japanese ports.

After the Fukushima nuclear plant in northeastern Japan was devastated by the earthquake and tsunami of March 11, vessel owners including BP Shipping Ltd. have required charterers to accept radiation risk and diversion clauses in contracts for Japan-related voyages, shipbrokers and traders said.

The clauses generally allow shipping lines to divert vessels from scheduled destinations at their own discretion if they consider radiation levels too high. Charterers could also be required to pay compensation for any radiation-related damage to the vessels.

“BP Shipping introduced the clause into vessel contracts…vessels on BP Shipping business are routed on a journey-by-journey basis, operating only so long as it is considered safe to do so,” the company said in a statement received by Dow Jones Newswires in an email over the weekend.

Earlier leakage of highly radioactive water, which had an iodine-131 concentration about 100 million times the legal limit, has resulted in contamination amounting to 4,700 terabecquerels in ocean near Fukushima, the nuclear plant’s operator, Tokyo Electric Power Co. (9501.TO), said last week.

Radiation concerns have also prompted other measures by the shipping community. In mid-April, the European Union advised all European ports to check vessels coming from Japan to see whether their radiation levels exceeded 0.2 microsieverts per hour above normal, according to media reports.

As of end-2010, BP’s shipping unit owned 54 vessels, including 37 medium-size crude and product carriers, four very large crude carriers, one North Sea shuttle tanker, eight liquefied natural gas carriers and four liquefied petroleum gas carriers, it said on its website.

-By Max Lin, Dow Jones Newswires

Pictured: BP Shipping’s “British Confidence” courtesy BP.com