Europe Gets Rare LNG Cargo from China Amid Gas Crunch
A tanker carrying liquefied gas is sailing to Europe from China in a rare move that was last made four years ago.
The Seapeak Glasgow loaded the liquefied gas at the Zhejiang Ningbo terminal, Bloomberg reported, citing tanker-tracking data, and is signaling Europe as its next destination. European LNG imports are running at record highs amid a seasonal peak in demand.
Earlier this month, Bloomberg reported that U.S. and Russian liquefied gas together accounted for over 80% of Europe’s seaborne gas imports. The U.S. share of that was 55% and Russian LNG accounted for mover 25%. That latter LNG will disappear from next year as the EU approved a complete ban on Russian gas imports earlier this year. As things stand now, the European Union is the largest buyer of Russian liquefied gas, absorbing half of the country’s total LNG output.
Despite record LNG imports, European countries are digging deeper into their gas storage, with EU-wide levels at just 35.62% full as of February 10th. In France, the level of gas in storage was even lower, at 26.09%, and in Germany it was 25.60%, according to Gas Infrastructure Europe.
China, meanwhile, has been filling its own gas storage, with demand for LNG weakening throughout 25, except the final two months of the year when seasonal demand caused a spike in imports. Thanks to ample supply, China is in a position to resell LNG, including to a destination as distant as Europe.
Europe is expected to import a record-high volume of liquefied natural gas this year as stronger demand for replenishing storage sites, the phase-out of Russian supply, and continued pipeline exports to Ukraine will drive increased demand, the International Energy Agency said earlier this year. Meanwhile, two gas storage sites in Germany are about to be shut down, as their operators told the German government they are no longer profitable.
By Irina Slav for Oilprice.com
Japan’s Mitsui Nears Deal to Buy Stake in Huge Qatar LNG Project
Japan’s trading company Mitsui & Co is in an advanced stage of talks with QatarEnergy to buy a minority stake in one of Qatar’s mega expansion projects, anonymous sources with knowledge of the development told Reuters on Friday.
Qatar’s state firm QatarEnergy is undertaking the world’s biggest LNG expansion project with multiple phases of expanding the export capacity of the offshore North Field, the world’s largest non-associated natural gas field, which Qatar shares with Iran.
Mitsui is close to buying a stake in one of the expansion projects, North Field South (NFS), which, if agreed, would boost Japan’s long-term gas supply from Qatar.
QatarEnergy currently holds 75% in NFS, with international oil and gas majors Shell, TotalEnergies, and ConocoPhillips owning minority stakes.
A Mitsui-QatarEnergy deal would follow a major LNG supply agreement Qatar has just signed with Japan’s biggest power utility, JERA.
Earlier this week, QatarEnergy signed a 27-year agreement with JERA to supply up to 3 million tons per annum (mtpa) of LNG from Qatar to Japan, with deliveries set to start in 2028.
JERA “remains committed to building a resilient, well-balanced LNG procurement portfolio by sourcing from the Middle East, Asia Pacific, the United States, and other regions,” said Global CEO and chair Yukio Kani.
For Qatar, the JERA deal would allow the world’s second-largest LNG exporter to regain some of the market share it has lost in Japan over the past decade. The 3 million tons of LNG per year would nearly double Qatari LNG supply to Japan, which was estimated at around 3.3 million tons in 2025.
To compare, in 2017, Qatar supplied about 10 million tons of LNG to Japan.
But back then, Japan was still the world’s top LNG importer and relied heavily on gas for power generation after closing all its nuclear power plants following the Fukushima disaster in 2011.
Since then, Japan has started to gradually return nuclear power capacity online, following safety inspections. Moreover, global LNG supply surged, and the flexible-destination U.S. cargoes have become more attractive to many buyers, compared to Qatar’s very strict destination clauses prohibiting buyers from reselling cargoes.
By Tsvetana Paraskova for Oilprice.com
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