Qatar Notifies European Clients of Delays in LNG Shipping Amid Red Sea Row

By Trisha Andrada

Jan 24, 2024 09:20 AM EST

One of the world's largest exporters of liquefied natural gas (LNG), Qatar, is putting off some supplies to Europe because of the prolonged transit durations caused by the situation in the Red Sea.

Some European customers were notified by the Middle Eastern nation of shipping delays and rescheduling, according to insiders who talked to Bloomberg. The merchants said that in order to fulfill contractual commitments, it is rearranging global supply by diverting goods from other locations and exchanging them for cargo that is accessible near Europe.

(Photo : STR / AFP via Getty Images)
A liquefied natural gas (LNG) tanker arrives at a gas storage station at Sodegaura city in Chiba prefecture, east of Tokyo on April 6, 2009 for the first shipment of LNG from Sakhalin-2 natural gas development project in Sakhalin, Russia.

Redirected Cargoes

Bloomberg cites ship-tracking data that shows that since January 15, Qatar has redirected six cargoes bound for Europe via the southern African Cape of Good Hope rather than the quicker route via the Red Sea and the Suez Canal. Because of the delays, ships are stuck for longer than expected, which limits the number of ships that can carry more goods.

The shipment of QatarEnergy LNG, which was originally planned to arrive at Edison's Adriatic port in Italy in early February, has been rescheduled for later that month, per sources acquainted with the subject. Notably, traveling throughout Africa will extend the trip to Europe by about two weeks.

Without mentioning the fuel's source, Edison informed the market in a notice that a shipment scheduled for Jan. 31 to Feb. 5 would not be delivered on the intended date.

Red Sea Crisis

So far, gas market disruptions in the Red Sea have been mostly ignored. Many commercial ships have avoided the region due to missile and drone assaults by Yemen's Houthi rebels. Due to huge stocks, robust renewables production, sluggish industrial demand, and an abundance of alternative LNG supplies, gas futures in Europe are approaching a six-month low.

Even if some shipments take longer, Qatar has not cut down on exports. According to ship-tracking statistics, the nation's LNG exports over the last two weeks have been around 7% higher than last year's.

Sectors