LNG ‘Traffic Jam’ Limits European Imports

“Exceptional Situation” has dozens of ships carrying liquefied natural gas (LNG) circling off the coasts of Spain

An October 17, 2022 story by Marwa Rashad and Belén Carreño from Reuters tells of the sort of snafu that results when LNG shipping supply exceeds storage and regasification capabilities:

..the arrival of multiple cargoes of the superchilled fuel has exposed Europe’s lack of “regasification” capacity, as plants that convert the seaborne fuel back to gas are operating at maximum limit. If the backlog is not cleared soon those ships may start looking for alternative ports outside Europe to offload their cargo. There are more than 35 LNG-laden vessels drifting off Spain and around the Mediterranean...

Reuters | October 17, 2022

Meantime, on this side of the ocean, Marcellus shale gas producers are lamenting what they feel is a shortage of pipeline export capacity, and last we read, winter storage levels of gas in the United States still remain below desirable winter levels.

Over the past year, natural gas commodity prices have spiked over the $9 price level a couple times, mostly due to LNG export demand and the Freeport LNG plant outage, but have now fallen-off into the $5 range. That commodity price started this year under $4 and was as low as $1.47 in June 2020. These wildly fluctuating commodity prices also affect electric bills, since more gas is being used by ‘peaker plants’ to produce electricity.

Natural gas power plant. Photo: Marcellus Air

“We have seen a high number of cargoes waiting offshore in southern Spain or circling in the Med, as well as some cargoes waiting off the UK.”

Alex Froley, LNG analyst at data intelligence firm ICIS
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“Floating storage levels in LNG shipping is at all time high levels with slightly more than 2.5million tonnes tied up in floating storage.”

Oystein Kalleklev, chief executive of shipowner FLEX LNG Management


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