More than 30 liquefied natural gas (LNG) tankers have accumulated around Europe, waiting for the winter period and the peak of the heating season to sell gas at maximum prices. This is reported by the British Financial Times with reference to the analytical company Vortexa.
The combined value of the gas in these vessels, the company estimates, is $2 billion, all of which are at anchor or slowly drifting towards northwestern Europe and the Iberian Peninsula. The publication notes that over the past two months, the number of tankers in European waters has doubled – traders are waiting to be able to sell their goods for more than current levels.
“LNG ships lined up at European LNG receiving terminals in pursuit of what they expected to be a premium market for this LNG,” Felix Booth, head of LNG at Vortexa, said, adding that it would take more to find a terminal for ships. about a month.
The queue of tankers arose against the backdrop of abnormally warm weather and a record filling of gas storage facilities in Europe. For example, German vaults are 98% full, French ones are 99% full, and Belgian ones are 100% full. The average storage occupancy rate across Europe at the end of October, according to Gas Infrastructure Europe, was 94%. Many companies have opted for the European market, because they can sell fuel at a better price there. Vortexa says 30 more tankers are heading to the coast of Europe, hoping to sell the gas at higher prices.
The publication recalls that a similar situation was already observed during the coronacrisis, when hundreds of tankers with oil remained at sea in anticipation of the return of economic growth, which was supposed to provoke an increase in oil prices. The European gas market is now in a contango situation – usually the supply of a resource becomes cheaper if the delivery of the futures does not take place in the next month: the later the delivery, the lower the price. In the European market, the situation is reversed – the nearest gas supplies, on the contrary, are relatively cheap, but for December and January – 30-35% higher than the market ones.
Vessel owners also benefit from idle tankers. The publication notes that the average cost of freight LNG tanker from the Gulf of Mexico has reached multi-month highs. A day on the road to Asian hubs now costs $478,000 per day, and to European hubs — $468,000 per day. Moreover, there have been no free ships on the market for a long time, which could at least slightly bring down freight prices, the newspaper notes.
The International Energy Agency (IEA) has previously warned Europe that it should start preparing for the next heating season, as in the face of a complete or almost complete reduction in gas supplies to Europe from Russia, the EU will have to find an additional approximately 30 billion cubic meters of gas. Moreover, European countries should increase investment in green energy and energy efficiency, and continue to reduce gas consumption.