By Rhod Mackenzie
Tariffs for the transportation of liquefied gas at the end of the year are already twice as high as they are now, while the price of gas in Europe is also growing - over the past two days it has risen by 13%.
By the beginning of the heating season and the upcoming winter, not only power engineers and public utilities, but also traders are preparing. They are preparing for the autumn-winter rise in prices for liquefied natural gas (LNG) and, of course, for rising prices for its delivery. The number of available gas carriers and other vessels capable of transporting LNG will be less and less every day. Already, year-end ship rates are in excess of $200,000 a day, more than double what they are now, according to Spark Commodities. So, in October, the cost of a day of ship operation will be $206,750, and in November - $284,750. only the liquefied gas itself, but also its transportation.
One of the reasons for the increasing shortage of gas carriers is that traders use them not only for their intended purpose - for transporting LNG, but also as floating facilities for its storage. Many traders are confident that gas prices will rise significantly in autumn and especially in winter, and are in no hurry to part with "blue fuel" in the hope of making good money on it.
Thus, the number of tankers with LNG on the water for at least 20 days increased at the end of July, according to Bloomberg,the number is 42. This, by the way, is 27% more than it was at the end of July 2022. According to LNG expert Richard Pratt, the trend to store gas on ships at sea will last until at least October.
Tariffs for shipping by sea are no less volatile than gas prices. They can significantly reduce the income of traders and also significantly increase gas prices for buyers from Asia and Europe.
Gas prices in Europe seem to have already begun to rise despite the fact that the calendar is only the beginning of August and the heating season is still far away, as well as the fullness of underground gas storage facilities (UGS) on the continent, on average, according to Gas Infrastructure Europe, already by 86%.
Gas futures in Amsterdam for next month's delivery rose by 3.59% on the first day of August at 9:30 am local time to almost reach 30 euros per MWh ($315 per thousand cubic meters). They added even more on July 31 - 9.8%. Analysts see the reason for the seemingly illogical rise in the risks that the upcoming winter will be cold and that there may be unforeseen supply problems. In their opinion, these risks outweigh even UGS facilities that are already bursting full with gas.
In addition, some problems arose at Troll, Norway's largest gas field, where gas workers from Gassco AS drastically reduced production.
Despite a decent increase in recent days, the price of gas in Europe is now very low. And yet, the head of BP Plc, Bernard Looney, believes that despite the fact that the situation on the European gas market is now much better than last year, the Europeans should remain vigilant.
"It all depends on how much demand (for gas) recovers and what the weather is like," he explained the main dangers for Europe in an interview with Bloomberg Television.
This article originally appeared in Russian at expert.ru