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Coronavirus epidemic diverts LNG tankers

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LNG Industry,

According to the latest Reuters report, four LNG tankers en route to North Asia have been diverted due to the Coronavirus outbreak in China.

The Coronavirus epidemic has affected 60 000 people worldwide and has had a significant effect on energy markets and demand, particularly in China.

In light of the circumstances, China’s top LNG buyer, China National Offshore Oil Corp’s (CNOOC), among others, has declared force majeure to suspend supply contracts with at least three LNG exporters.

As a result of this action, Asian LNG demand has taken a notable hit, with prices falling below US$3 per million Btu (a record low). Reduced demand brought about by a mild winter has also been a contributing factor.

Shipping companies are now scrambling to divert cargoes bound for Asia to more profitable destinations. For example, according to Reuters, three of four LNG tankers loaded in Qatar and Oman have been diverted from their original eastwards course. Two will reportedly now deliver their shipments to South Hook terminal, UK, while the other is returning to the Gulf of Oman.

In addition to cargoes being diverted, several carriers have been flagged as floating storage. According to a Reuters source, there are 15 vessels currently flagged as floating; two in the Middle East, two in western Australia and 11 scattered across Asia. The source expressed that this number of floated LNG cargoes was unusual for this time of year.

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