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Dutch Gate LNG marks four months of reloads

DATE:2014-03-17 | comments: | posted by:liuailin

Two years after the facility opened, companies using capacity at the Gate terminal in Rotterdam began reloading LNG cargoes and have not looked back since.


After initially sending out small-scale cargoes in September 2013, the first conventional-sized reload left the terminal in November the same year. Since then there have been a further six reloads, including one in 2014, according to data from Gate.

Since startup in September 2011, the terminal has been consistently underused because of low demand for gas in Europe. The terminal has received only 14 cargoes – approximately 0.6 mtpa of LNG in 2013 – despite having a capacity of 8.5 mtpa.

The terminal has received one LNG cargo, of 145 thousand cubic metres (Mcm), in 2014. It was delivered in early January and was almost immediately reloaded.

Offtakers at the terminal began small-scale reloads in September 2013, sending volumes of less than 8 Mcm of LNG to Scandinavia. This was followed by the first conventional-sized LNG reload of 135 Mcm in November.


A further four reload cargoes had left the terminal by the end of 2013, taking its total exports to 450 Mcm of LNG, excluding small-scale exports. Including small-scale reloads, the terminal sent out nearly 475 Mcm of LNG in 2013, which is more than a third of all imports.


Low demand, ex-ship contracts


The rise in the number of LNG reloads is a result of the combination of reduced demand for gas in Europe and countries being tied into ‘ex-ship’ contracts requiring them to take delivery of LNG.


The majority of LNG contracts contain clauses allowing shipments to be diverted when not needed, but a number of European contracts require the delivery of cargoes to specific terminals.


The Zeebrugge LNG terminal, in Belgium, has supply contracts with Qatar Petroleum, Eni and GDF Suez. Under the contract with Qatar Petroleum, the terminal is required to receive LNG shipments even when they are not needed.


Operators would normally be forced to sell expensive LNG into their saturated domestic market for a loss, but reloads offer a way to minimise losses by selling the fuel on the spot-market – often to buyers in Asia and Latin America.


Zeebrugge exported around 75% of all LNG it received in 2013. This is set to continue, with the terminal sending out four shipments in the first two months of 2014, one more than the same period of 2013, according to Fluxys. Belgium is supplied by pipelines from the UK, the Netherlands and Norway, meaning it is very secure in its gas supply and can send out reloads on a regular basis.

LNG reloads

Spain reloaded


Spain is also tied into receiving LNG, and reloads more cargoes than any other European country. Four of Spain’s six LNG terminals reload LNG and the country sent out a total of 40 cargoes in 2013, according to data from transmission operator Enagas. This was an increase of nine cargoes on 2012.


Spain received about 11 mtpa of LNG in 2013, and 2 mtpa of this was sent out as reloads. Spain has sent out six cargoes in the first two months of 2014, amounting to 578 Mcm, which is four cargoes – 430 Mcm – more than the same period last year.


Demand for gas in Spain peaked in 2008 and has fallen by 25% over the past six years, according to Enagas. The country has increasingly relied on pipeline connections with Algeria, reducing its LNG deliveries where possible (see Pipelines dominate Spanish imports in 2013, 21 February 2014).


France and Portugal also sent out reloads in 2013, but at lower rates than Spain and Belgium. France reloaded 11 cargoes from its three LNG terminals with a combined volume of 1.1 million cubic metres of LNG.


The majority of shipments originated from the Fos-Cavaou terminal that started up in 2010, according to the terminal operator Elengy. There have been no reloads from any of the French terminals in 2014.


Portugal’s Sines terminal made only one reload in 2013, with a volume of 79 Mcm, according to data from REN Atlantico. The Sines terminal received 29 LNG cargoes in 2013 and two cargoes in 2014, but has made no reloads in 2014.


Before the financial crisis, it was expected that the EU Emissions Trading System (ETS) and limiting greenhouse gas emissions would require a large-scale switch away from coal to gas for power generation. The crisis reduced energy demand, however, and a slow recovery has kept it low.


This, combined with the failure of the ETS to exert any pressure for utilities to move away from coal, has meant demand for gas in Europe has fallen over recent years. A number of LNG terminals were built with the intention of securing supply in a gas-constrained future and are now struggling to remain viable.


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