Global gas: Start of Qatar LNG disruption
London, 8 June (Argus) — The first signs are emerging that the cutting of ties between Qatar and countries including Saudi Arabia, the UAE, Bahrain, and Egypt is starting to impact LNG trading routes.
After the severing of diplomatic relations on 5 June, Qatar-linked vessels were banned from Saudi and UAE waters, including the major bunkering port of Fujairah. But Qatari tankers could still reach international seas through Iranian waters. The Suez Canal Authority said earlier in the week that Qatari vessels would still be able to use the waterway. But two Qatari LNG tankers off the south coast of Oman changed course today and turned away from the Red Sea. The 266,000m³ Al Mayfar is now headed southeast and could be going to Europe via South Africa. The 266,000m³ Zarga has done a U-turn and is headed back east towards the Middle East and Asia.
The Suez Canal Authority could not be reached for comment on whether the status of Qatari vessels has changed.
Shell has swapped two of its Middle East LNG deliveries amid the banning of LNG carriers originating from Qatar at Dubai's 5mn t/yr Jebel Ali terminal. Shell's 173,400m³ Maran Gas Amphipolis was due to deliver US LNG to Kuwait's 5.7mn t/yr Al-Ahmadi port this week, but was diverted to Dubai on 6 June. And a Dubai-bound Qatari cargo on the 145,000m³ Maran Gas Asclepius has instead gone to Kuwait.
Dubai imported at least 13 Qatari LNG cargoes in 2016, Argus estimates. Shell and state-controlled producer Qatargas signed a 15-year supply deal with Dubai Supply Authority (Dusup) in 2008.
But Qatari LNG deliveries to Egypt do not appear to have been disrupted yet. The 162,000m³ Golar Glacier is due to deliver Qatari LNG to Egypt this week, and the 140,000m³ Galicia Spirit departed Qatar's 77mn t/yr Ras Laffan facility yesterday and is declaring for delivery to Egypt's port of Sumed on 16 June.
Egypt's second floating LNG storage and regasification unit (FSRU), the 170,000m³ BW Singapore, has been moved south from Ain Sukhna to the port of Sumed. The move is unrelated to the ongoing political dispute and was arranged months ago, traders said. And there seems to be little impact on loadings at Qatar's 77mn t/yr Ras Laffan facility this week. A total of 13 LNG carriers were waiting outside the port this afternoon, while four cargoes were loading.
"We see no impact to LNG production or export," US major ExxonMobil and a stakeholder in Qatar's LNG facility said. Other market participants said the rate of loadings is in line with expectations. And shipping operators said the number of empty vessels outside Ras Laffan is in line with normal levels and some moved there from Fujairah after they were banned from UAE waters.
At least four Qatari vessels are due to arrive in Fujairah this week. The 135,420m³ Zekreet, 217,000m³ Al Khuwair and 216,000m³ Al Utouriya are expected to arrive at the port tomorrow, while the 210,000m³ Duhail is due to arrive on 10 June.
Qatari LNG tankers are already looking at alternative bunkering options after being banned from Fujairah. Regional options could include Kuwait, Oman, India, or Sri Lanka. And Qatari vessels have been enquiring about bunkering further afield, in Gibraltar and Singapore.