UK books seventh October LNG cargo

The UK has booked another LNG cargo for October, extending the recent surge in imports. But forecasts for colder than average weather in northeast Asia could divert cargos away from Europe later in the season.

The 266,000m³ Mozah was traversing the Suez Canal this morning, destined for the UK. The vessel has delivered regularly to South Hook in recent years, but has also visited the Isle of Grain, more recently. The tanker could arrive in the UK by the end of next week, if it does not encounter any delays.

Tankers carrying up to 1.7mn m³ have now been booked for the UK in October, up from 677,700m³ in September, making it potentially the largest monthly amount since June. LNG deliveries to Europe typically increase during the autumn months because demand from Asia drops at this time of year, as it falls between the summer cooling and winter heating seasons.

Temperatures in Japan are expected to be in line with the seasonal average for the time of year in November, but there is a 40pc probability of below average temperatures from December until February.

Northeast Asian LNG prices had climbed from around $13/mn Btu in mid-October 2012 to almost $15/mn Btu by mid-November before rallying to almost $20/mn Btu by late January 2013, as demand increased throughout the period. That said, drought conditions in Brazil increased demand for LNG imports last winter, bolstering prices. But following considerably wetter weather through much of this summer, Brazilian demand has been considerably weaker. And the LNG supply outlook for the winter has improved since last year. Loadings at Snohvit were partially disrupted by power supply problems in November and January last winter, while Nigeria LNG experienced problems through much of the season.

The Norwegian facility has been fully operational since June. Nigeria LNG did face some problems as recently as earlier this month, but it has been fully operational since then. The start of operations at Angola LNG and Algeria’s Skikda terminal this summer could also improve cargo availability later this winter.