You are here
Empty LNG ships at biggest producer show how virus grips market
[LONDON] At least 12 empty liquefied natural gas (LNG) vessels are sitting idle off the coast of Qatar, one of the world's biggest producers of the fuel, as the deadly coronavirus plays havoc with international commodities markets.
The reasons for the unusual gathering of ships aren't immediately clear. But the timing coincides with ship diversions, cargo cancellations and reduced demand in Asia.
The parked vessels have returned after delivering cargoes to places including India, Pakistan, Bangladesh, South Korea, Japan and Poland. Some have been floating just offshore Qatar's production lines since last week, ship-tracking data on Bloomberg shows.
Delays in loading ships that in ordinary times would be kept busy follow a plunge in Asian spot LNG prices to record lows. The coronavirus outbreak forced China National Offshore Oil Corp, the nation's biggest LNG buyer, to tell suppliers including Royal Dutch Shell plc and Total SA that it won't take delivery of cargoes. Both of the oil majors rejected the force majeure.
Analysts from Wood Mackenzie Ltd, to IHS Markit Ltd and Rystad Energy have cut their projections for China's LNG demand growth as a result of the virus, which has closed factories and curtailed travel across the region. Those estimates already had been marked down by mild winter weather and exacerbating a global glut of the fuel.
One Qatari vessel, the Al Hamla, loaded a cargo in Qatar on Feb 1 and has been idling since then. Its next destination is indicated as India's Dahej on Feb 26, which means a potential deferral of the delivery given a short distance to the terminal.
The Al Dafna, which left the Ras Laffan plant in Qatar on Feb 9, is headed west despite indicating the Far East as a destination.
Representatives of Qatar Petroleum and subsidiary Qatargas were not immediately available to comment.