Surging LNG Imports Drive Down British Wholesale Gas Prices
LONDON, March 18 (Reuters) - Britain's imports of LNG for March are at their highest levels since October 2015, helping British wholesale gas prices slide to a more than 18-month low.
Britain is set to receive 14 cargos in March, with six tankers scheduled for this week. The country is on track to import 1.18 million tons of LNG this month, amounting to 1.63 billion cubic meters of gas or 52 million cubic meters a day.
The influx of LNG follows a large boost in supplies in the past half a year, mainly from the United States and Russia, and subdued demand in Asia, sending more cargoes to European shores.
Consistently high send-out rates of regasified gas into the pipeline system over the past six months has also increased the share of LNG in total gas supply to almost 30 percent in March from rates as low as 2 percent in December 2017.
This has weighed heavily on wholesale gas prices in Britain which have halved since a September peak of 80 pence per therm. This is especially unusual as prices tend to rise in winter when gas is used for heating.
On Monday, day-ahead wholesale gas prices were 37.80 pence per therm, with six LNG tankers converging on Britain's three import terminals this week.
The LNG industry is being transformed as long-awaited supplies from the United States start to come onstream with the commissioning of new production and export facilities.
Russian LNG from the Arctic Yamal facility, which opened in December 2017, has also changed the European energy landscape.
Qatar, Britain's dominant historical supplier, remains the top LNG producer in the world but will have to expand production capacity in coming years to keep the top spot.
The proliferation in LNG supply, as well as more flexible supply contracts and pricing mechanisms, has diluted Qatar's share of British LNG supplies to 34 percent so far this year, from 39 percent last year and 87 percent in 2017.
Related News
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- ONEOK Agrees to Sell Interstate Gas Pipelines to DT Midstream for $1.2 Billion
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Tullow Oil on Track to Deliver $600 Million Free Cash Flow Over Next 2 Years
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- GOP Lawmakers Slam New York for Blocking $500 Million Pipeline Project
- Texas Oil Company Challenges $250 Million Insurance Collateral Demand for Pipeline, Offshore Operations
Comments