More delays expected for Chinese LNG terminals

A few LNG carriers have been waiting for several days to discharge at import terminals in China, with more vessels expected to face delays as importers struggle to receive cargoes in the face of slower demand and high inventories.

The 266,000m³ Aamira arrived at state-controlled PetroChina's 6.5mn t/yr Tangshan terminal on 31 January from Qatar and remains anchored offshore without having discharged its cargo. The 266,300m³ Shagra has been anchored offshore Tangshan since its arrival on 6 February, according to vessel tracking data.

The 155,000m³ Marvel Pelican is near Ningbo where state-controlled CNOOC's 3mn t/yr Ningbo import terminal is located. It arrived on 8 February, vessel tracking data showed.

Market participants suggested the delays to discharge may be at least a week, with it unclear if the end of the extended lunar new year holidays yesterday will shorten the delay as more staff return to work. The Aamira has already been offshore Tangshan for 10 days.

Not all vessels scheduled to arrive at Chinese terminals may face delays. The likelihood of delays is higher at Ningbo in Zhejiang province, Tangshan and the 2.2 mn t/yr Tianjin terminals in Hebei province and the 6.7mn t/yr Dapeng terminal in Guangdong, market participants said.

Delayed discharges not only mean buyers incur demurrage charges, but they could cause falling charter rates to start creeping up if more vessels are forced to wait before they can deliver scheduled cargoes.

The Argus-assessed freight day rate for TFDE vessels east of Suez was at $55,000/d on 7 February, down from $75,000/d two weeks earlier on 27 January.

But any impact of delays on charter rates is unlikely to be immediate.

"In 6-7 days from now we could see 5-10 vessels waiting outside ports," an LNG trader in Singapore said. "The impact of these could stop the slide in rates. But we are not seeing that yet."

Much will depend on whether suppliers choose to wait to discharge or decide to divert cargoes to alternative destinations.

Market participants expect such large vessels as Qatar's Q-Flex and Q-Max vessels are likely to wait offshore Chinese terminals as there are few terminals that can accommodate these vessels and few buyers with appetites for larger cargoes currently. Q-Max vessels have a capacity of around 266,000m³, while Q-Flex vessels have a capacity between 165,00-215,000m³.

But at least three cargoes have so far been diverted from Chinese ports, with one a Q-Flex vessel.

The 217,000m³ Al Kharsaah discharged its cargo at Thailand's Mab Ta Phut terminal on 8 February, after being diverted from CNOOC's Tianjin terminal and its Ningbo terminal before that. The vessel was originally scheduled to arrive at Ningbo on 11 February.

The 130,405m³ Puteri Delima was diverted away from the China Sea on 7 February and was circling in Philippine waters but is now signalling arrival at Japan's Hachinohe port tomorrow. It is carrying a cargo from the Petronas-operated Bintulu facility in Malaysia. PetroChina diverted the 154,800m³ Tangguh Foja on 2 February to Singapore from the 6.5mn t/yr Rudong terminal. The vessel arrived in Singapore on 5 February.

LNG importers are looking for ways to manage their scheduled LNG receipts and inventories, with CNOOC last week issuing notices of force majeure (FM) to its key suppliers, market participants said. Total said last week it has rejected a FM request from a Chinese buyer. It is unclear if other state-controlled buyers have followed CNOOC's lead.

by Camille Klass