A Shell-operated LNG carrier that diverted from the Netherlands last week is delivering part of its cargo to a bunker vessel in Shell's fleet near the Bahamas, Kpler ship-tracking data show, likely an effect from the winter storm that recently swept the US.
Shell controls the liquefaction capacity at the 4mn t/yr Elba Island export terminal in Georgia, which is also authorized to supply LNG for bunkering operations. The company has flexibility with the feedgas, allowing it to redirect gas into the domestic market, where the recent arctic blast raised nearby spot prices to record highs. The terminal has taken no feedgas since 24 January and has instead injected at least 550mn ft³/d into the gas grid, pipeline data show.
But with Elba Island not producing LNG, Shell may need to redirect cargoes from elsewhere to meet bunkering obligations in the Bahamas. Shell's 174,000m³ Nantes Knutsen loaded at the 11.8mn t/yr Atlantic LNG terminal in Trinidad and Tobago on 16 January and initially signaled arrival at the Netherlands' 12.4mn t/yr Gate terminal. The vessel diverted toward the Bahamas' Freeport anchorage last week and on 27 January began a ship-to-ship transfer (STS) with the Shell-operated 18,000m³ New Frontier 2, a bunker vessel operating in the Jamaica and Bahamas small-scale market, Kpler data show.
The Nantes Knutsen will still have a partial cargo remaining after the STS. It could follow another LNG carrier in Shell's fleet, the 174,000m³ Paris Knutsen, which is signaling for arrival at Elba Island on 28 January with a cargo from Trinidad. If completed, that would be the first LNG delivery to Elba Island since 2020, according to Kpler data.
Record high prices in Transco zone 5, a bellwether for prices in the US mid-Atlantic region, likely are incentivizing Shell to deliver into the US market. The day-ahead price at Transco zone 5 was $133.85/mn Btu on 26 January, the highest since Argus began collecting data in February 2009, before declining to $40.78/mn Btu on 27 January. The price remains at a significant premium to delivered LNG prices for cargoes arriving in northwest Europe in the second half of February, which were $12.16/mn Btu the same day.
BP delivered another Trinidad-loaded cargo to the 5.75mn t/yr Cove Point LNG terminal in Maryland on 26 January. Cove Point also ties into Transco zone 5.
Farther north, Total's 174,000m³ LNG Endeavour arrived at the 7.4mn t/yr Saint John import terminal in New Brunswick, Canada, on 27 January with a cargo from Egypt. LNG delivered to Saint John can be regasified and sent by pipeline to the US northeast, where day-ahead prices at Algonquin Citygates were $126.62/mn Btu on 26 January, the highest since Argus began collecting data in September 2008. That price also declined on 27 January to $64.74/mn Btu, but a colder-than-normal forecast could offer price support for the pipeline-constrained region through 1 February.
