Home NewsMaritime LNG tankers gather around Europe

LNG tankers gather around Europe

by Bunkerist
0 comment

As the coronavirus pandemic seriously affects liquefied natural gas (LNG) demand, delays in tanker transportation are occurring and tankers accumulate on the European coast due to the increase in the number of ships used as floating tanks.

Virus crashes have led to a drop in industrial gas consumption worldwide, reducing demand for LNG, and initially caused cargo delays, and cancellations with the accumulation of cargoes in the Far East and India waters.

LNG demand in Asia met its needs at record low prices, thanks to some vessels that managed to be less affected by crashes. Due to excessive supply and low prices in Asia, Europe has become a last resort. However, LNG inventory levels, high gas storage costs and low demand in Europe caused a bottleneck.

Companies use different criteria to use a cargo as a floating storage, taking into account the loading dates and the speed of the ship, among other factors.

Despite lower demand and higher inventory levels than before, there are more cargo flows to Europe than last year, with the production of more export projects considering last year.

Natural gas prices in Europe fell to an all-time low in some contracts this year.

According to Refinitiv Eikon data, the UK front-month gas contract fell below US Henry Hub’s front-month futures last week, while the Dutch front-month was trading under Henry Hub at some point on Thursday.

According to Refinitiv Eikon data, the total gas storage volume in Belgium, the Netherlands, France and Germany is 330 terawatt hours, or about 66% of the storage capacity, 20% more than a year ago.

Gas volume stored in the UK is 64% full compared to 54% a year ago.

It is clear that the LNG prices will remain low throughout Europe during the summer due to the warm season.

Analysts’ estimates for the amount of LNG arriving in Europe this summer have declined by 5 million tonnes because buyers are expected to cancel US shipment loads this summer as well as cargo from other suppliers.

Leave a Comment