Coromandel International-Sub-sea pipelineLeakage-Is it an Act of God?

What happened to Coromandel International on……near Ennore in their sub-sea pipeline carrying Ammonia is an event that is waiting to happen to many industries in India. 

This is the second such incidence in India in 2023. 

Government is trying to fix the responsibility on Coromandel, to extract a penalty.
Coromandel contends it us an “Act of God”, taking no responsibility for the event. 

Different sections of a sub-sea pipeline are exposed to different risks. Each section needs to be reviewed for attendant risks. Cyclones or Earthquakes pose natural hazards while dredging, fishing nets and Anchors pose man-made hazards. Normal wear & tear, of course, does pose a major hazard.

It is not if Coromandel international was doing proper risk reviews to protect its pipelines. Liability and Pipeline Property Insurers would be asking Coromandel International, if they make a claim, whether the cause of leakage is sudden and proof of the same. Otherwise, the claims will not be payable as they will be deemed to be due to “gradual” cause. 

There is another interesting, but not a good development for the economy –TN Government has stopped the plant due to public unrest, resulting in loss to the economy. Can the company claim this business interruption loss from its insurers? Most probably no, as the trigger is not falling in their fire policy for the manufacturing plant. A food for thought for Risk Managers!

Sub-sea Pipelines carrying Natural gas pose a bigger risk of fire accidents. In July 2023 Mexico’s state owned Pemex encountered a similar accident which triggered a massive fire in the Company’s Off-shore platform killing two people and injuring many with a huge property and business interruption loss. In fact in the end the pipeline rupture causing a big fire in the platform seems to repeating in Mexico, as there was a similar incident in 2021.