LNG

Shell Plc has confirmed its shareholding with four other partners in the new LNG export plant being developed in the United Arab Emirates by Abu Dhabi National Oil Company’s (ADNOC) at Al Ruwais.

The Royal Navy warship “HMS Duncan” has deployed from Portsmouth to the Red Sea as part of the mission to keep open international shipping routes amid renewed attacks on vessels by the Iranian-backed Houthi rebels of Yemen, ending hopes that shipping in the region could possibily return to near normal by the end of 2024.

The attacks have forced LNG carriers, oil tankers, containerships and other vessels to continue to be re-routed to longer and more expensive journeys around southern Africa amid renewed concerns that the Israel-Hamas war would further destabilise the Middle East now that Iran’s proxy, the Houthis, are back in action.

Shipping data shows that there has almost been a complete halt on LNG carriers entering the Red Sea area during the first five months of 2024.

In April 2024 a total of just 159 ships of all types used the Suez Canal, marking a sharp decline of 85 percent in the traffic from more normal times.

Re-routed

A total of 2,922 vessels used the Cape of Good Hope route in March, and the number was little changed in April at 2,873.

Maritime traffic at the Cape of Good Hope increased by 125 percent in the last six months, reflecting the diversions from both the Suez Canal and Bab-el-Mandeb Strait off Yemen.

The number of containerships and LNG carriers using the Cape was up by 260 percent and 180 percent respectively in April, according to shipping data.

All countries in the Eastern Mediterranean, including Turkey, have found themselves at the end of a dead-end for all trade from Asia, as ships no longer reach them through the Suez Canal and instead have to go round South Africa and enter the Med by the Strait of Gibraltar, adding to costs.

Meanwhile, the United States Navy and the Royal Navy have led the most strikes against Houthi targets in retaliation for their attacks on vessels.

The Houthis have launched repeated drone and missile strikes in the Red Sea region since November 2023, later expanding their attacks to the Indian Ocean.

The group has said it will attack any ships sailing towards Israeli ports, even in the Mediterranean Sea, though there have as yet been no attacks on vessels in the East Med area.

Shipping protection

The UK government said that the Type 45 destroyer just deployed will relieve its sister ship “HMS Diamond”, which has been protecting shipping lanes in the Red Sea from Houthi attacks since before Christmas.

The Royal Navy said that “HMS Duncan” was a like-for-like replacement as it is armed with the same Sea Viper missile system and equipped with the same radar systems, which are able to accurately detect faraway threats.

During her deployment, “HMS Diamond” has shot down nine drones and one missile, launched by Houthis from the coast of Yemen at cargo ships.

“The 200 men and women of ‘HMS Duncan’ have worked to ensure that their ship is ready to deploy, successfully completing trials and training last week in preparation for the deployment,” said a Ministry of Defence statement.

“This will see the ship work to ensure freedom of navigation and make international waters safer and more secure for merchant vessels,” the statement added.

“HMS Duncan” spent five months leading NATO’s premier task group in the Mediterranean Sea last year, until handing over flagship duties to the Italian Navy in December.

The ship is now ready for more operations, with over 60 new members joining the ship’s company. 

Moody’s Investors Service, the US ratings agency, said in a report into liquefied natural gas that Chinese demand in 2024 will be similar to last year and while European gas markets remained resilient the region’s reliance on LNG could increase price volatility.

Sept 22 (LNGJ) - Australia’s Offshore Alliance union agreed to the pay and conditions recommendation of the nation’s labor disputes arbitration body, the Fair Work Commissioner, and called off the strike by around 500 members at the Gorgon and Wheatstone LNG export plants in Western Australia that had failed to disrupt cargo flows.

   “The Offshore Alliance will now work with Chevron to finalize the drafting of the agreements and members will soon cease current industrial action,” the unions said in a statement. The terms of the new wages and conditions agreements were not disclosed. “Chevron Australia has consistently engaged in meaningful negotiations in an effort to finalize Enterprise Agreements with market competitive remuneration and conditions,” said Chevron in its brief statement. The Offshore Alliance for the country's oil and gas industry comprises the Australian Workers’ Union and the Maritime Union of Australia.

Worldwide liquefied natural gas and wholesale pipeline market prices and futures skyrocketed by nearly 50 percent in the past week as US Gulf Coast LNG cargo values hit $18 per million British thermal units for December even amid current substantial European Union gas storage levels as doubts resurface about Western energy security policies.

Asian spot liquefied natural gas prices fell and European wholesale values declined by a bigger margin as the early European Union gas storage build continued at a steady pace, while German import volumes dropped off and China’s deliveries increased.

There is an enormous divide in charter rates in discussions for liquefied natural gas carriers up until September 2023 compared with October to December.

April 11 (LNGJ) - The LNG export plant on the Pacific Coast of Peru, the only such facility in the whole of South America, has delayed shipping any cargoes so far in April. PeruPetro, the national energy company, has not signalled any problems at the Pampa Melchorita facility and listed five cargoes exported in March, two to South Korea, one to the UK, one to Japan and one to China.

Chinese natural gas imports, including LNG and pipeline natural gas, dropped by 9.5 percent in the first nine months of 2022 as the economy slowed while China paid over 40 percent more for its gas during the period.

European Union natural gas benchmarks and North Asia spot liquefied natural gas cargo prices advanced because of concerns that Russia could cut off the main pipeline link to Germany and cause a global LNG supply crisis at a time when US and Australian shipments were down because of outages.