Chinese LNG terminals expect further delays
There have been several days of delay at Chinese import terminals for some LNG carriers sitting waiting to discharge. But further vessels are expected to face similar holdups as most importers are struggling to receive cargoes, thanks to high inventories and slower demand.
Three known cargoes have been diverted from Chinese ports so far, one of which was a Q-Flex vessel. Qatar’s Q-Flex (which have a capacity between 165,00-215,000m³) and Q-Max (with a capacity of around 266,000m³) and other such large vessels are likely to wait offshore Chinese terminals, because there are few terminals that can accommodate them (and few buyers with appetites for larger cargoes).
The delays to discharge may be at least a week according to market participants, but there are suggestions that as more staff return to work at the end of the extended lunar new year holidays yesterday, the delay will shorten.
Marvel Pelican, for example, is anchored near Ningbo, where state-controlled CNOOC’s 3mn t/yr Ningbo import terminal is located. The 155,000m³ vessel arrived on 8 February and has yet to discharge its cargo.
In a similar vein, the 266,000m³ Aamira arrived from Qatar at state-controlled PetroChina’s 6.5mn t/yr Tangshan terminal on 31 January and remains anchored offshore ten days later – it hasn’t yet discharged its cargo.
But these delays might not apply to all vessels arriving at Chinese terminals. The likelihood of a delay is greater at the 6.7mn t/yr Dapeng terminal in Guangdong, Ningbo in Zhejiang province, Tangshan and the 2.2 mn t/yr Tianjin terminals in Hebei province.
Market participants said LNG importers are looking for ways to manage their scheduled LNG receipts and inventories, with CNOOC last week issuing notices of force majeure (FM) to its key suppliers, and Total rejected a FM request from a Chinese buyer, it said last week.
If further vessels are forced to wait before they can deliver scheduled cargoes, buyers will incur demurrage charges, but falling charter rates could start creeping up too – although this is unlikely to be immediate. Suppliers might choose to wait to discharge or decide to divert cargoes to alternative destinations, and this will change the whole situation.
For more information visit www.cnoocltd.com
11th February 2020