Suez Canal blockade to delay 1 million tons of LNG delivery to Europe

Oil&Gas Materials 26 March 2021 11:57 (UTC +04:00)
Suez Canal blockade to delay 1 million tons of LNG delivery to Europe

BAKU, Azerbaijan, March 26

By Leman Zeynalova – Trend:

According to preliminary reports from rescuers, the Suez Canal could even remain blocked for several weeks, Trend reports with reference to Rystad Energy.

“Assuming an average of five vessels per week, around 1 million tonnes of LNG could be delayed for delivery to Europe if the blockage last for two weeks. In a worst-case scenario of the Canal being blocked for four weeks then there would be 2 million tonnes of delayed cargo deliveries,” said the company in its latest report.

The voyage from Suez to northwest Europe (eg Isle of Grain in the UK) takes around nine days at an average speed of fifteen knots.

The complete route from Qatar to northwest Europe takes around 17 days and the alternative route around the Cape of Good Hope would take more than 30 days, making this an unviable option, at least for the time being.

“Even if the route is liberated within one week, there is a large queue of cargoes lining up to cross the Canal, so the return to normal flow will take some time. And the longer it takes to liberate the route, the longer the queue of vessels.

It is interesting to see if the US will try to benefit from the Suez blockade as shipments from its LNG export facilities could reach Europe much quicker than a vessel starting from the Middle East that would go around Africa.

The US gas production is set for a continuous monthly increase and it could be a perfect opportunity for US producers to secure some orders at a time of such a transport route crisis.

The current situation could also in turn affect LNG vessel shipping rates for product of US origin, as demand could rise,” reads the report.

The Suez Canal is one the world’s busiest trade routes, and this blockade is having great implications on global trade, including LNG, as shipments to Europe from one of the world’s largest LNG producers - Qatar – essentially all pass through there.

The Canal is the main route for LNG cargoes heading from the Middle East to Europe and for some cargoes heading from the Mediterranean to Asia. During 2020, close to 260 LNG cargoes were sent from Qatar to Europe via the Suez Canal, or an average of five per week.

Data shows that currently there are three loaded cargoes in the Suez Gulf waiting to cross to the Mediterranean that were originally expected to arrive at European regasification terminals during the first week of April.


Follow the author on Twitter: @Lyaman_Zeyn