Rystad Energy Research said that the floating of a delinquent container ship in the Suez Canal, one of the world’s busiest trade lanes, may delay the delivery of about one million tons of liquefied natural gas to Europe, on ten ships, if the suspension of navigation continues for two weeks.
Rescue officials said resolving the delinquent ship in the canal could take weeks. The canal is the main conduit for Europe’s imports of LNG from the Middle East and some shipments from the Mediterranean to Asia.
Rystad reported that Qatar, a major producer of liquefied gas, shipped nearly 260 cargoes to Europe in 2020 via the canal.
“Even if the road opens within a week, there is a long line of cargoes waiting to cross the canal. Return to normal flow will take some time,” said Carlos Torres Diaz, head of Rystad’s gas and electricity markets.
There are three shipments for delivery in early April that were waiting for Wednesday to cross into the Mediterranean, and there are at least two shipments in the Arabian Sea on the way to the Suez Canal.
Lucas Schmidt, an analyst at Wood Mackenzie, said that the LNG tanker “Golar Tundra” had loaded from the Idku terminal in Egypt on March 21 and was on its way to Asia. At the southern end of the canal, the tanker was waiting to cross, carrying a cargo from Qatar.
A spokesman for the company “Inagas” for the operation of power transmission systems said that the delivery of liquefied gas cargoes to seven re-gasification ports in Spain had not been affected yet.
He added, “No liquefied gas ship bound for Spain has been affected by the delinquent ship in the Suez Canal, and no ships are scheduled to come from countries that use this route in the next two weeks.”
During the winter season in the Northern Hemisphere, when heating demand grows, congestion in the Panama Canal contributes to pushing spot LNG prices in Asia to record levels as shipping companies are forced to resort to longer and more expensive routes.
The spring season and the pipeline network could contain the price increase this time.
Schmidt said rental costs were low, around $ 30,000 a day, but could rise if the unrest continues.
Kepler Consulting said on Wednesday that shipping companies may have to reverse course and sail around the Cape of Good Hope, or wait in the Red Sea or the Mediterranean while waiting for the delinquent vessel (Evergreen) to float.
Rystad confirmed that the journey from Suez to northwestern Europe takes about nine days at medium speeds. The company added that the journey from Qatar to northwestern Europe takes about 17 days, but re-routing the route around the Cape of Good Hope may take more than 30 days.
“It could be an ideal opportunity for US manufacturers to place more orders at a time of crisis for the transportation route,” said Torres Diaz.
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