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Global gas: Europe’s small spring LNG boost

05 Apr 2018 19:14 (+01:00 GMT)
Global gas: Europe's small spring LNG boost

London, 5 April (Argus) — Northwest Europe has booked more LNG cargoes in early April compared with recent months, but the increase in sendout this spring has been smaller than a year earlier.

Europe typically receives more LNG during the spring, when there are more spare cargoes after the end of northeast Asian heating demand. Northwest Europe's LNG imports often ease in the middle of the summer, when northern hemisphere cooling demand peaks.

But the spring boost to European LNG sendout has been smaller than a year earlier as rising demand in other regions has continued to at least keep pace with growing supply as new liquefaction units start up.

Northwest Europe's sendout fell to 544 GWh/d in March from 720 GWh/d a year earlier. And it was 612 GWh/d in the first few days of April, down from 786 GWh/d over the whole of April 2017.

The aggregate decrease in regasification in other countries was much smaller, partly because of higher sendout in Portugal, Lithuania and Poland early this month.

The low sendout in northwest Europe has partly been driven by restocking tanks. LNG inventories were heavily drained late in the winter as prompt prices spiked to encourage raising regasification and outbidding other regions for cargoes to replace the drawn down stocks.

Stocks at the Netherlands' Gate terminal dropped to their lowest since the terminal was commissioned in 2011. And the UK's Isle of Grain had plenty of space for cargoes without raising sendout.

Low Qatari deliveries have also contributed to low UK sendout early this month, which has accounted for much of northwest Europe's decrease compared with April 2017.

South Hook regasification has remained close to its usual minimum 5mn m³/d with few arrivals expected.

Qatar has been able to find more profitable destinations than Europe for April deliveries, especially with new demand from Pakistan and the expected start of imports from Bangladesh.

Pakistan received eight cargoes in March, including four Qatari cargoes, up from six in March last year. But delays to the start-up of gas-fired power plants in Pakistan may lead to lower-than-expected import growth

Qatar was expected to supply the commissioning cargo for Bangladesh's first import project at the end of the month.

And maintenance operations at Algeria's 9.2mn t/yr Skikda facility checked southern European receipts. France's southern terminals of Fos-sur-Mer scheduled lower receipts this month than a year earlier. Skikda's maintenance was expected to end around mid-April.

But new liquefaction capacity in the Atlantic basin has led to a diversification of sources for LNG receipts in Europe and partially offset the lower receipts from Qatar. This increased the regionalisation of Atlantic deliveries compared with last year.

Two US cargoes were unloaded in Europe in March-early April, compared with no US delivery at the same time last year.

Cove Point's commissioning cargo unloaded in the UK in March, a vessel carrying a Sabine Pass cargo arrived in the UK today.

At least another two vessels carrying cargoes from Sabine Pass were sailing eastbound in the Atlantic, suggesting potential deliveries in Europe of the Middle East.

The US added a fourth train at the Sabine Pass facility in September 2017, with a peak capacity of 5mn t/yr, while the Cove Point facility with a peak capacity of 5.75mn t/yr exported its first cargo last month.

And at least five cargoes from Russia's newly commissioned first 5.5mn t/yr train at the Yamal complex were unloaded at northwest European terminals in March. The facility started exporting last December.


European LNG sendout in spring GWh/d

Northwest Europe's LNG sendout remains slow GWh/d