First US LNG for Europe set for UK arrival
The US is set to supply gas to Europe for the first time, with a tanker of liquefied natural gas expected to arrive in the UK from Louisiana in late November.
US gas prices have fallen more than 30% since the beginning of the year, pressured by a surge in North American gas production which has also reduced US LNG imports to minimal contracted volumes.
The US started re-exporting LNG to higher-paying markets in Asia and South America earlier this year, but the Maersk Meridian LNG tanker, expected to arrive on 18 November at UK’s Isle of Grain terminal, according to AIS Live data on Reuters, is the first to head to Europe – Russia’s main export market.
“It’s the first actual case of a direct Atlantic arbitrage that I’ve seen,” one UK gas analyst said to Reuters.
Although the Maersk Meridian can only carry 166,000 cubic metres of super cooled gas, a 216,000-cubic metre tanker called Al Hamla is expected to load a re-export cargo at the same terminal soon, although its destination is unclear.
Nearly 20 billion cubic feet of gas has been re-exported from the US this year, excluding the gas aboard the UK-bound vessel.
In mid-October, two cargoes were shipped from the US Gulf by Excelerate Energy, one of which is heading to Kuwait, the other to Argentina.
Only Sabine Pass and the Freeport LNG import terminal have re-export capacity in the US, although Sempra Energy’s Cameron terminal, also in Louisiana, has applied for a license.
UK’s gas market is more seasonal than the US, with wholesale gas prices tending to rise more in winter because it has relatively little storage and is heavily dependent on gas for heating.