LNG has a new obstacle on its way to Europe


The European frantic excitement around diversification and the search for alternative sources of gas has only led to a collapse in quotations of raw materials, but not to the approach of the cherished goal. The haste of European officials "revived" related industries, closely bordering on the gas sector. For example, we are talking about the rise in the cost of electricity generation, the production of fertilizers and other products, as well as, of course, the transportation of imported liquefied fuel, the main feature of which is mobility. All these types of economic activity are in crisis. Irina Slav, an expert at the OilPrice resource, writes about this.


Anticipating the huge demand for LNG, traders and producers are struggling to book or charter as many LNG carriers as possible for the long term to deliver products to consumers. But now it is no longer so easy to do, the thing is that, firstly, there are not enough ships, and, secondly, the cost of services has risen sharply.

According to the expert, charter rates for gas carriers have risen to the highest level in 10 years. Rates for LNG tankers are now around $120 per day of sailing, according to Clarksons Platou Securities. This is an extremely high cost, which can only be compensated by the huge selling prices for products transported by the tanker.

There is no doubt that companies will pay such a sum. Those looking to transport LNG include TotalEnergies, Shell and China's Unipec, according to the Financial Times, which mentions shipowners and LNG brokers. In other words, very serious industry players. However, there are doubts that ordinary consumers will hardly be able to pay the final, final cost of gas.

Trying to overcome the shortage of ships to transport the demanded raw materials, some companies are taking radical steps, namely buying tankers rather than leasing them. They are simply sure that the demand for LNG will not decrease in the coming years, but, on the contrary, will grow, and the problem of freight will only get worse. All this will become a new obstacle on the way of American gas to Europe.

The prices for transportation services and, in general, all the excitement around the topic under consideration, are obviously artificially inflated. However, the market is what it is now and players have to accept its rules of the game in order to get their excess profits.

Apparently, the crisis with LNG carriers will not subside in the near future. It takes years to build new gas carriers, and this also leaves its mark on what is happening. A year ago, no one expected that Europe would suddenly become the largest buyer of American liquefied gas in just a few months.
  • Used photos: gazprom.ru
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  1. Expert_Analyst_Forecaster 4 June 2022 08: 44
    +6
    The golden "age" of Europe (1986 - 2021) has passed. Now down, down, down.
    1. Oleg Rambover Offline Oleg Rambover
      Oleg Rambover (Oleg Pitersky) 4 June 2022 09: 35
      -8
      The decline of Europe has been promised for two centuries. Do you think it's finally here?
      1. Expert_Analyst_Forecaster 4 June 2022 10: 29
        +6
        I'm not talking about the sunset.
        I'm talking about the fact that as well as Europe lived in the period I indicated, it will no longer live. In general, there have already been two world wars in Europe. Therefore, it will probably not be worse than it was after these wars.

        If Europe does not start the third world war. And they can, because they have people in power who have been lowered by a long period of prosperity.
        1. Oleg Rambover Offline Oleg Rambover
          Oleg Rambover (Oleg Pitersky) 4 June 2022 12: 43
          -10
          Quote: Expert_Analyst_Forecaster
          I'm talking about the fact that as well as Europe lived in the period I indicated, it will no longer live.

          Are you talking about the fact that instead of Lord of the Hundreds cheese they will buy some kind of Camembert? Poor people, how can they live with this... I am glad that in Russia there are such caring people like you, who are concerned about the well-being of Europeans. By the way, does Russia belong to Europe? The Russians obviously will not live as well as in the 10s of the XNUMXst century. As they say, there was nothing to live well and get used to.

          Quote: Expert_Analyst_Forecaster
          If Europe does not start the third world war. And they can, because they have people in power who have been lowered by a long period of prosperity.

          They can’t, they don’t have armies for such an event. But omitted by a long period of peace, dreaming of hitting nuclear weapons on anyone, Russia is full. I hope our government is not like that.
  2. Bakht Offline Bakht
    Bakht (Bakhtiyar) 4 June 2022 08: 47
    +1
    Anticipating huge demand for LNG, traders and producers are racing to book or charter for a long period of time as many LNG carriers as possible to deliver products to consumers.

    This means that companies are trying to have long-term contracts. Well, a gas company will not charter a gas carrier for five years, without a contract for gas supplies.
    At the same time

    The European Commission has officially proposed refuse to renew long-term contracts for natural gas after 2049.

    The decision was made on December 15, 2021. The European Commission did not specify how natural gas differs from LNG.
    According to the European Commission, long-term contracts are of a non-market nature.

  3. zzdimk Offline zzdimk
    zzdimk 4 June 2022 09: 59
    +1
    Is it bad? Nobody will buy Russian LNG?
    LNG production is not only liquefaction, but also the extraction of helium with all other noble gases. The more LNG processed on the territory of the Russian Federation, the greater the reserves of rare raw materials.
  4. guest Offline guest
    guest 4 June 2022 14: 14
    +4
    Quote: Oleg Rambover
    I hope our government is not like that.

    And who are your authorities? Washington has power over you personally.
  5. Expert_Analyst_Forecaster 5 June 2022 11: 14
    +2
    Quote: Oleg Rambover
    I am glad that in Russia there are such caring people like you who are concerned about the well-being of Europeans

    The old generation of Europeans created a wonderful territory. Not without problems, I talked with the locals and know a little. But in general, rich, generous, giving the opportunity to live in peace to a variety of people.
    Ukrainian women acquaintances told how they visited Ukraine and returned back to Italy, to relative poverty. Because there was just darkness in Ukraine (according to them in 2013). One woman dragged her mother and two daughters to Italy. But she plowed and plows all day long.

    So. Ukraine was the richest republic after the collapse of the USSR. But they all screwed up. And this infection came to Europe. Now Europe is successfully destroying its prosperity. The Germans and the British will get out. But Spain, Italy and many other European countries will significantly reduce their standard of living. For what, I don't understand. Once again, Europe stupidly and mediocrely steps into the abyss.
  6. Expert_Analyst_Forecaster 5 June 2022 11: 29
    +2
    Quote: Oleg Rambover
    The Russians obviously will not live as well as in the 10s of the XNUMXst century. As they say, there was nothing to live well and get used to.

    We are improving the foundation of our economy.
    Higher resource prices are good for us, but bad for Europe (and for China and others). We are becoming less dependent on Europe and the US. It also makes it possible to trade more successfully. Russia will more purposefully stake the territories on which it will rely economically and militarily.

    If we talk about the strategy, then it is true.
    If there is no nuclear war, then in 3-4 years we will live no worse than in the 10s of the 21st century.