LNG

A huge floating LNG storage unit, the “Saam FSU”, arrived in Russian waters off Murmansk on June 25 as LNG developer Novatek re-organizes its trading logistics for the Yamal export plant and the new Arctic LNG II project as the Yamal facility also started a shutdown and maintenance programme.

Novatek, the Russian natural gas developer of the Arctic LNG II project, has concluded two important agreements on offtake from the facility coming on stream in 2023 while selling a stake to French major Total in its cargo trans-shipment subsidiary.

Fluxys Belgium said first-half net profits increased in a market little affected by the impacts of the Covid-19 pandemic as the Zeebrugge LNG import terminal experienced record traffic and there was keen interest for additional send-out capacity.

Europe’s largest LNG import terminal, the Isle of Grain facility located 45 miles southeast of London on the Medway-Thames estuary in Kent, has received 22 LNG shipments in 2020, including its 500th overall cargo, as the UK’s three terminals have unloaded around 60 shipments in two-and-a-half months.

US cargoes and others from Atlantic Basin exporters as well as Russia have been pointed at the UK as a key destination as prices have tumbled in Asia at just over $3.00 per million British thermal units for most of 2020 amid a global over-supply.

The UK National Balancing Point (NBP) price was last at the equivalent of $2.95 per MMTU, down from $3.70 per MMBtu in January, while the main Continental European price, the Dutch Title Transfer Facility (TTF), has tracked the UK benchmark, but was slightly higher at $3.00 per MMBtu.

“We’re delighted to confirm that we welcomed the 500th ship at our LNG import terminal on the Isle of Grain,” said Simon Culkin, Terminal Manager at National Grid's Grain LNG.

“The ‘LNG Merak’ berthed, delivering a cargo from Zeebrugge, and is the 22nd ship to arrive at Grain this year,” added Culkin.

The 174,000 cubic metres capacity “LNG Merak” is one of the newest vessels transporting cargoes from the Russian Yamal export plant in northern Siberia, as well as trans-shipments from ports such as Zeebrugge in Belgium.

“Since commissioning our terminal in 2005, we have taken delivery of LNG from 13 countries, further strengthening the diversity and security of UK gas supplies,” Culkin stated.

LNG carrier deliveries to Grain LNG have been more than matched by the two terminals at Milford Haven in Wales, South Hook LNG and Dragon LNG, which have welcomed a combined 35 cargoes.

The growing UK’s deliveries since January have come from nations such as the US, Qatar, Nigeria, Trinidad and Russia.

LNG shipments to Britain increased by around 64 percent in 2019 compared with the previous year and 2020 is expected to be  a record year as more US capacity has come on stream.

Natural gas currently makes up 40 percent of the UK’s total energy mix, up from 35 percent in 2015.

About 45 percent of UK natural gas comes from domestic resources in the North Sea and 55 percent is imported, with 15 percent coming from LNG and 40 percent from pipeline imports, mostly from Norway.

“LNG delivers much needed flexibility and energy reliability, enabling the integration of intermittent renewable energy and provides access to affordable energy,” explained National Grid’s Culkin.

“We’re very proud that LNG, supported by our extensive infrastructure at Grain,’ he added.

LNG imports have increased significantly over the past six months all over Europe, including to other large importers such as France and Spain.