LNG Tankers Off Fujairah Store Fuel Equivalent to 3 Months China Demand

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Jun 2010

Liquefied natural gas tankers parked off Fujairah in the United Arab Emirates are storing the equivalent to about three months of China’s average purchases, signaling an oversupply in the market. About 43 percent of the total capacity of tankers in the Gulf of Oman are holding LNG, Pan EurAsian Enterprises Inc. said in an e-mail yesterday, citing data from Odysseus tracking service. That’s equivalent to about 1.4 million metric tons of the cleaner-burning fuel. China imported 7.63 billion cubic meters, or 5.6 million tons, last year, according to BP Plc’s Statistical Review of World Energy 2010.
An oversupply of gas and weak demand have sent spot charter rates to the cheapest in five years, prompting producers and traders to take advantage of the low charges to store the fuel. Qatar, the world’s biggest producer of LNG, was idling at least eight tankers in the Gulf of Oman as of June 3, according to ship-tracking data from AIS Live Ltd. The vessels have a combined capacity of 1.8 million cubic meters, enough to supply the U.K. for more than a month.
The 32 vessels off Fujairah include 26 Q-class tankers with a capacity of more than 200,000 cubic meters each, the U.S. energy consultant said. The parked vessels have a capacity of about 3.1 million tons, or about 14 percent of the global capacity afloat, the consultant said, basing its estimates on the posted draft of the ships.
The LNG stored is equivalent to about 62 billion cubic feet of natural gas (1.7 billion cubic meters), the note said. Qatar will idle 66 percent of its export plants this year, according to Poten & Partners.
LNG is created by cooling gas to about minus 260 degrees Fahrenheit (minus 162 degrees Celsius), shrinking it to about a 600th of the original volume, according to the U.S. Department of Energy.

Source: Bloomberg