Reuters are reporting that the escalating diplomatic conflict between Qatar and several of its Middle East neighbours has shaken the LNG market, causing at least one tanker to change course and UK gas prices to spike.
In one of the earliest signs of the effect on the LNG market, Royal Dutch Shell sent an LNG cargo from the US to Dubai, after the United Arab Emirates banned Qatari ships from entering UAE ports.
A cluster of 17 LNG tankers are now moored off the coast of the Qatari LNG export facility at Ras Laffan.
Gas prices in the UK spiked on 8 June, with the UK National Balancing Point (NBP) price for July up over 4.5% after two Qatari tankers that were likely bound for the UK changed course.
It is unclear why those tankers shifted movements, though traders said they may be diverted around the continent of Africa rather than transit the Suez Canal, which is where they were expected to go. Traders worry that Egypt might bar tankers carrying Qatari cargoes from using the Suez Canal, though it is bound by international treaties not to block the canal.
Analysts still do not see an interruption in supply in the LNG market, even with Qatar's role as the world's largest producer.
Egypt, however, continues to buy LNG from Qatar brought in by Swiss commodity trade houses, like Trafigura, Glencore and Vitol, which take ownership of the cargoes at the Qatari port and do not use Qatari ships. One source said four tankers were expected to deliver Qatari LNG to Egypt over the next two weeks.
As exclusion zones took effect, Qatar's fleet of LNG vessels anchored off the UAE's port in Fujairah prior to the diplomatic cut-off has moved out.
Shell has a deal to supply the Dubai Supply Authority (DUSUP) with LNG which it typically sources from Qatar. But the ban meant it had to source the LNG from elsewhere.
Shell's Maran Gas Amphipolis tanker, carrying around 163 500 m3 of LNG from Cheniere's Sabine Pass LNG export terminal in Louisiana, was initially headed toward Kuwait's port of Mina Al-Ahmadi but rerouted on 7 June for Dubai's port of Jebel Ali.
The tanker is currently unloading at DUSUP's floating import terminal at Jebel Ali.
Read the article online at: https://www.lngindustry.com/liquefaction/09062017/qatar-gulf-row-disrupts-lng-market/