LNG Cargoes Transferred via Ship-to-Ship outside Strait of Hormuz
Three liquefied natural gas (LNG) cargoes loaded in Qatar and the United Arab Emirates have been transferred between ships outside the Strait of Hormuz in recent weeks for delivery to India and Japan, according to ship-tracking firms. This unusual practice has become necessary due to the Iran war’s disruption of Middle Eastern LNG supply flows, doubling Asian LNG spot prices.
The first transfer took place when GasLog Shanghai, which was involved in an incident while exiting the Strait of Hormuz, completed a ship-to-ship (STS) transfer with GasLog Savannah in late August off the coast of Oman. This transfer was facilitated by Vortexa and Kpler, two ship-tracking firms that monitor global energy trade.
Disruption in LNG Supply Flows
The Iran war has had a significant impact on Middle Eastern LNG supply flows, causing prices to double. The conflict has largely shut the Strait of Hormuz, disrupting energy supplies and driving up prices. LNG exports from the region have fallen since the conflict’s start, contributing to the surge in Asian spot LNG prices.
Ship-to-Ship Transfers Gain Importance
As a result of the disruption in supply flows, ship-to-ship transfers have become an essential means of delivering LNG cargoes. The Al Rekayyat tanker, controlled by QatarEnergy, conducted an STS transfer with another Qatari LNG tanker, Tembek, in mid-August on the east coast of the United Arab Emirates. The cargo was originally loaded at Ras Laffan and was subsequently delivered by Tembek to India’s Dahej terminal on August 31.
Mraweh Completes Ship-to-Ship Transfer
A third tanker, ADNOC-controlled Mraweh, completed an STS transfer with LNG Enugu off the coast of Oman in mid-August. The Mraweh had loaded an LNG cargo from Das Island in early August before conducting the STS transfer with LNG Enugu. The LNG Enugu is currently en route to Futtsu, Japan.
Consequences of Disruption
The disruption in supply flows has significant consequences for energy markets and economies. The surge in Asian spot LNG prices is expected to continue, driving up costs for consumers and businesses alike. The impact on global trade and economic growth will depend on the duration and outcome of the conflict.
Original Article: Qatari, UAE LNG cargoes transferred via ship-to-ship outside Strait of Hormuz | Reuters — Reuters