Four Asia-bound LNG tankers change destination

Four liquefied natural gas (LNG) tankers that were en route to North Asia were reported to have diverted as a result of the Covid-19 outbreak, which has impacted demand for gas in mainland China.

Three of the four diverted LNG tankers loaded from Qatar, with one originating from Oman. They were originally showing ‘Far East’ as their destination, reported Reuters, citing anonymous sources.

A further 15 LNG tankers were flagged as “floating storage” globally, according to Rebecca Chia, LNG analyst with data intelligence firm Kpler, who was speaking to Reuters.

Of the 15 vessels flagged as floating, two are in the Middle East, two in western Australia and 11 scattered across Asia, Kpler’s Chia said. Kpler classifies tankers as floating storage if they loaded the cargo more than five days ago and are travelling at a low speed over a prolonged period, among other factors. Until the Covid-19 outbreak, it was unusual to see LNG vessels floating at sea during this time of the year, she added.

China’s leading LNG buyer, CNOOC has invoked force majeure to suspend contracts with at least three LNG suppliers, it was reported earlier this month.

Two of the diverted four tankers will now arrive at South Hook terminal in the UK, while another made a U-turn in the Arabian Sea and is in the Gulf of Oman, heading back to the Gulf, Kpler’s Chia said.

Qatargas’ tanker Mekaines (IMO 9397303) was identified as the tanker that  made a U-turn in the Arabian Sea on February 10th and was now headed back to the Gulf. She had loaded a cargo from Ras Laffan on February 5th.

2009-built, Marshall Islands-flagged, 163,922 gt Mekaines is owned by Nakilat Shi 1695 Inc care of Nakilat Shipping (Qatar) Ltd of Doha, Qatar. It is entered with Gard AS on behalf of Nakilat SHI 1695 Inc. Claims leader for H&M is Axa XL Syndicate 2003.

The Qatari energy minister said last week that Qatari energy companies were actively engaged in accommodating requests to reschedule or re-route Qatari oil and gas cargoes to China.

The effect of the outbreak on energy markets was seen to be increasing, with a sharp fall in demand in China for crude leading to the stranding of oil cargoes off the Chinese coast and prompting shippers to look for other Asian destinations.

Chinese refineries have cut output by about 1.5m bpd in the past two weeks.

That has left several VLCCs, capable of holding more than 2m barrels each, unable to unload at China’s top crude import terminal of Qingdao, reported Reuters, citing Refinitiv data.

Other cargoes were being diverted to South Korea, Malaysia, Singapore and other locales in China, while storage tanks in Shandong province – where Qingdao is located – were filling quickly. Shandong’s commercial and strategic crude oil stocks are currently at 171.5m barrels, not far from their peak of 175m barrels in early June 2019, according to oil analytics firm Kpler. China’s overall crude storage is at 760m barrels, versus a peak of 780m barrels in early June last year, Kpler’s data showed