With the Northern Sea Route from Arctic Russia to North Asia opening up earlier this year, the first LNG cargo is on route from Novatek’s Yamal LNG export terminal to China. The arctic-class carrier ‘Christophe de Margerie’ left Yamal LNG on May 18 and is due to arrive at the Tangshan import terminal, operated by PetroChina, on June 11.
Shipping data shows that the ‘Christophe de Margerie’ LNG tanker is accompanied by another tanker and two nuclear-powered ice-breakers, the ‘Yamal’ and the ‘Vaygach’. The transit of the Northern Sea Route is expected to take 23 days.
The warming of sea waters is melting the ice in the Russian Arctic earlier each year, allowing more and more LNG carrier to deliver cargoes to customers in Northern Asia. The Northern Sea Route starts east of the Novaya Zemlya archipelago and specifically runs along the Russian Arctic coast from the Kara Sea to the Bering Strait to enter the Northern Pacific Ocean.
Second carrier could arrive mid-June
A second liquefied natural gas carrier is heading for China after the early re-opening of the sea route from Arctic Russia to North Asia and could arrive as early as June 16.
The 172,600 cubic metres capacity Arc7 LNG carrier “Vladimir Voronin” left the port of Sabetta with a cargo from the Yamal LNG plant on May 24 and is apparently heading for the port of Tianjin in northeast China, according to shipping data. The “Vladimir Voronin” could arrive at Tianjin port by June 16 after the normal transit time from the Yamal plant in northern Siberia of around 23 days.
Europe-Asia arbitrage window re-opens
Analysts say this year’s early availability of the Northern Sea Route, combined with a slowly opening LNG arbitrage window between Europe and Asia, is will likely lead to the redirection of several Yamal LNG cargoes towards North Asian markets, especially China.
The Platts Japan-Korea Marker for LNG spot prices for July was last seen at $2.280/MMBtu and at $2.425/MMBtu for August, substantially higher than in early May.
The rebound in Asian gas prices comes as European prices at the UK National Balancing Point (NBP) and the Dutch Title Transfer Facility (TTF), had eased off towards $1.40/MMBtu and $1.55/MMBtu, respectively.
