France : On a hot sunny day in July, Europe’s largest port is busy loading super-chilled liquefied natural gas onto a tanker, creating snow flurries during a heat wave.
The cargo from the Gate terminal in Rotterdam, which was built to import the fuel. Around same time, a vessel from the Russian Arctic region arrived with another batch of LNG, according to ship-tracking data on Bloomberg. It’s an example of how Europe’s LNG terminals are keeping busy even as the fuel mostly heads for other higher-paying markets such as Asia.
With Europe absorbing record amounts of pipeline gas from Russia and prices for the fuel stronger in Asia, LNG terminals in Europe are finding work by either loading and transferring cargoes from one vessel onto another. The gas is so cold that sections of pipes carrying it aboard are covered in frost, and flakes of snow drift into the air from the loading arms. LNG is gas that’s chilled to minus 160 degrees Celsius (minus-260 Fahrenheit) until it becomes a liquid that can be poured into tankers.
The scene is a good sign for Novatek PJSC and its partners, which are using specially-built tankers to export the LNG from their Yamal LNG plant in Northern Siberia. These ships can navigate through the region’s thick ices, but they’re too expensive to use on long journeys. The solution? Transfer the cargoes from ice-class tankers in northern European ports and onto normal ships for the long journey east. Rotterdam is one of the places they’re working.
“Yamal cargoes, in the winter especially, coming down into Europe can either be injected into the gas system here or reloaded for onward transportation as they come off the specialized tankers,” Paul Wogan, chief executive officer of the LNG ship owner GasLog Ltd., said on a visit to the GasLog Hong Kong vessel as it was loading in Rotterdam. “That’s very much price driven arbitrage, but it is creating more liquidity to be able to play that price driven arbitrage. Yamal is probably the bigger factor allowing for seeing reloads out of Europe.”