En Español



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

U.K. to receive its first America's LNG shipment from Peru, not the U.S.


LNG tanker Gallina en route to UK via Panama Canal, expansion has cut journey distance by two-thirds

WARSAW/LONDON
Petroleumworld.com 02 09 2017

Almost a year after the first liquefied natural gas cargo left the Gulf of Mexico, the U.K. is still waiting to claim a slice of American supply. By the end of the month it will, but it won't be made in the U.S.

Peru LNG loaded a vessel on Monday destined for England, according to Lima-based Perupetro SA's website. It's the first of the plant's 401 cargoes to head to the U.K. and the first into the liquid markets of northwest Europe since 2010, not counting a shipment in August to France's Dunkirk used to cool down a new import terminal.

Map showing the Gallina on route to England from Peru

That a South American supplier beat the U.S. to Britain's energy market highlights changes in the way gas is being shipped and traded worldwide. While Peruvian LNG has a more natural home in nearby markets, it now has to compete with fuel from the U.S., which is expanding its export capacity. At the same time, an expansion of the Panama Canal means the shipping distance to Europe has shrunk.

“Geographically you would think this is a strange deal,” said Nick Campbell, energy risk manager at Inspired Energy Plc in Preston, England. The U.K. “may be the perfect spot to move the cargoes on to more lucrative destinations such as southern France. The expanding LNG trade means the illogical can become logical.”

The Gallina will arrive in Britain on Feb. 21 assuming an average speed of 17 knots, according to shipping website sea-distances. It is the seventh tanker to load at the Hunt Oil Co.-operated Peru LNG facility this year, with the other six vessels going to Spain. 

"Peru LNG produces the liquefied natural gas and sells the cargoes to traders, like Shell in this case, and doesn't decide the final destination," Sara Rivera, the company's spokeswoman, said in a phone interview from Lima.

Peru's biggest market has traditionally been Mexico, which received 34 of the 71 tankers it loaded in 2016, the last in October, and has boosted imports from the U.S. Of this year's Peru LNG cargoes, all but two are traveling via the Panama Canal.

While U.K. LNG imports may have plummeted from the highs in 2011, the nation has boosted reloads of previously imported LNG and Trafigura Group plans to reopen an import terminal as new supply is expected to lead to a glut.

LNG Imports Into U.K. (Billion Cubic Meters)

Cheniere Energy Inc. has exported almost 70 cargoes from its Sabine Pass facility in Louisiana, none of which have yet to reach northwest Europe. Ineos Group Ltd. has been shipping shale gas to Europe in the form of ethane, a feedstock for chemical production that is carried on far smaller vessels than the LNG tankers that supply methane used for heating and power generation.

The shipment to England on the Gallina was priced using the U.K.'s National Balancing Point, where front-month gas cost about $7 a million British thermal units on Tuesday. That compares with $3.13 a million Btu on the U.S. Henry Hub and $7.22 a million Btu for spot LNG in Singapore.

The U.K. unloaded just two LNG tankers last month, both from Qatar, compared with more than six a year earlier, according to data compiled by Bloomberg. LNG imports fell 18 percent from a year earlier in 2016 through November, to about 25 percent of total foreign supply, the latest government data showed. More than 90 percent of that came from Qatar, with the rest from countries including Norway, Algeria and Trinidad & Tobago.



Story by Rob Verdonck and Kelly Gilblom from Bloomberg News.

We invite all our readers to share with us
their views and comments about this article
.


Write to editor@petroleumworld.com


By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95,
'98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:P.Ohep F. /Producer - Publisher:P.Ohep F./
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2016, Petroleumworld ™  / Elio Ohep Fitzgerald- All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.