LNG re-exports from Europe to South America in the year to date rose to 34.5 billion cubic feet of gas equivalent of LNG from 7.7 Bcf in 2011, data published by Bentek Energy showed Wednesday, as market players worked the arbitrage between low prices in Europe and higher prices in South America.
Based on Bentek LNG shipping assumptions of full cargoes, year-to-date this is roughly equivalent to 13 LNG cargoes with an average size of 2.65 Bcf, compared with five cargoes with an average size of 1.54 Bcf in 2011.
"Re-exports have been used increasingly over the last year to capture spreads between excess European LNG supplies and premium markets in Asia and South America," Ross Wyeno, LNG analyst at Bentek, said.
Bentek is a unit of Platts.
A re-export or LNG reload is when a company delivers LNG to a terminal's storage tanks, then another ship arrives to take the LNG to deliver elsewhere.
Reloads have been particularly popular in Spain, but Belgium's Zeebrugge LNG terminal, France's Montoir terminal and more recently Portugal's Sines terminal are European import terminals that are also able to re-export supply. The majority of re-exports are still largely from Spain and Zeebrugge.
The Excelsior LNG tanker, however, is likely to be the second cargo to have re-exported from Montoir since it loaded its first re-export cargo for delivery to Japan on April 28, Bentek said.
Shipping data showed the vessel entered Montoir on November 13 having previously berthed at Argentina's Bahia Blanca on October 25. Although its final destination has not been confirmed, according to Bentek, the Excelsior is now bound for the South Atlantic, backtracking the route from its last port of discharge in Argentina.
Argentina has received about 70% of European LNG re-exports to South America, totaling around 23.9 Bcf i the year to date, while Brazil has received around 10.6 Bcf.
Argentina relies on gas for half of its energy needs; it imports LNG and pipeline gas from Bolivia. In July, Argentina signed a deal with Bolivia to increase pipeline imports to 16.3 million cu m/day in the second half of the year from 13.6 million cu m/day in the first half, in an effort to reduce its LNG imports.
The reduction in LNG imports is also part of Argentina's efforts to trim spending on foreign energy supplies, which surged 110% year-on-year to $9.4 billion in 2011.
"Now it's likely that some LNG imports were offset by Bolivian pipeline gas. The question is, was it a substantial amount, or at least threatening to [Argentina's] future LNG import growth projections," Wyeno said.
