Fundamentals: Rising South Hook send-out points to end of LNG drought

Increased regularity of LNG tankers arriving into the British LNG terminal South Hook has caused send-out from the site into the grid to recover from record low levels in October, data from system operator National Grid showed.

Output since the start of November has averaged at a rate of 9.5 million cubic metres (mcm)/day, 67% higher than October’s mean rate, data from British network operator National Grid showed. However, the average flow rate in November 2015 was over four times higher.

Qatargas owns the entire supply chain from the liquefaction capacity in Ras Laffan, Qatar to the regasification facility at South Hook. As a result, the British facility often acts as a sink for any LNG volume that cannot be offloaded at a higher price.

Strong Asian demand caused the Qatari producer to slash exports to Britain – and Europe in general – through October, but there are some signs that Britain may see more arrivals going into December.

The 266,000 cubic metres (cbm) Al Mafyar discharged its cargo at South Hook on 17 November. The vessel, which has visited South Hook 20 times over its lifetime, had been diverted to a Chinese regasification capacity on its last two laden voyages.

The 214,176cbm Al Huwaila was entering the Suez Canal on its way to Europe on Thursday, data from shipping platform LNG Edge showed. The vessel, which unloaded at South Hook on its last journey to Europe, has offloaded its cargo in Japan on its last two laden journeys from Ras Laffan.

Two LNG vessels from Qatar are also due to berth at the Belgium port of Zeebrugge over the coming week, according to port data.

Faltering relaods

Arrivals of Qatari gas into Zeebrugge have had little impact on consistent send-out levels into the Belgian grid over the past two months, as capacity holders at the terminal have reloaded tankers and sold volumes onto higher priced markets.

The same strategy has been employed by capacity holders at the Isle of Grain, Britain’s only re-export terminal, in October.

Combined reloads from the two terminals hit their highest year-to-date level in October, totalling 466,500cbm. However, both facilities have yet to reload a cargo in November, another indication that less cargoes are being drawn to Asia. thomas.rodgers@icis.com