LNG produced at the Yamal project in Siberia, according to Bloomberg, is now reported to be headed to U.S. northeast, which experienced a spike in prices for natural gas during a sustained period of unusually cold weather, raising heating demand and sending domestic gas prices soaring for a few days.
This load of LNG first went to the UK on a French-flagged tanker, briefly stored at Isle of Grain terminal, then was reloaded Jan 7 and is due to arrive in Boston on Jan 22. Note it is not clear who actually owns the re-exported cargo. i.e. who is the trader behind this latest deal? The operator of the storage facility would not comment It is believed that Petronas LNG UK brought the original load to the UK, but was it resold to another trader?
So, why is this newsworthy? For two reasons. First, Yamal LNG is a joint venture between Novatek PJSC (Russian), Total SA (French) and China National Petroleum Corp. The project went ahead, despite USA federal government financial sanctions in 2014 because of Russia’s involvement in the Ukrainian crisis. So some in the news media are describing this as a “sanctioned” cargo.
Second, the USA is now increasingly an exporter of LNG, for example from Louisiana, and soon Texas and Maryland. So why wasn’t a need for LNG supplied domestically? A quote from the Oxford Institute for Energy Studies helps to clarify: ““The market shouldn’t see any irony in this cargo going to the USA. It’s a normal trade, LNG is supposed to travel globally to where the demand is.”
This is not the first LNG reload into the USA – in June 2014 a cargo came from Huelve terminal in Spain.
According to GIIGNL’s 2018 Annual Report, global LNG trade expanded by 3.5 Bft3d in 2018, to 38.2 Bft3d—a record 10% increase.
Power, LNG projects drive pipeline construction in Africa
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