LONDON: Shipments of liquefied natural gas (LNG) to Europe are running close to record levels as the continent prepares to meet peak demand in the cold winter months.
Import terminals in Spain, Belgium, Britain and elsewhere are operating at full capacity to take in cargoes attracted by European prices that remain higher than those offered in the US market, though not above levels in Asia.
“All the terminals are full,” an LNG trading manager at a major energy company said. “European prices have been high since the summer, they are still very high. I think imports this year will probably be higher than last year.”
“There are some spot cargos coming in, but it’s getting very difficult to find a place to put them (because of the squeeze on import capacity),” he said.
Another industry source said cargos had recently been diverted away from Spain, Europe’s largest importer of LNG, because of a lack of available storage space.
European imports of LNG are on track to be over 40mn tonnes this year, breaking last year’s record level by 280,000 tonnes, according to US-based market analysts Waterborne Energy Inc
LNG, gas which has been chilled into liquid form for loading onto tankers, comes to Europe from various sources including Qatar, Oman, Egypt, Algeria and Nigeria.
Europe gets the bulk of its gas via pipelines from North Sea fields and imports piped in from Russia and Norway, but the role of LNG is growing.
The Paris-based International Energy Agency has forecast LNG will meet a fifth of gas demand in the OECD region by 2010.
Spain is expected to import 1.3mn tonnes in October, roughly 40% of Europe’s total imports, Waterborne Energy said.
The second biggest importer is France, with a projected intake this month of 800,000 tonnes, with Britain and Belgium joint third with 290,000 tonnes, it said.
Cargoes have been arriving steadily at the UK’s only operating import terminal, the Grain plant near London, for several months.
On Friday, Grain received its fourth cargo this month, the 42nd cargo since the terminal opened in July last year.
US company Excelerate Energy plans to launch an LNG import facility in Teesside, northern England this winter. The company recently said it had lined up several cargoes for delivery to the UK, Europe’s biggest gas market. – Reuters