On October 17th, dozens of ships carrying Liquefied Natural Gas (LNG) circling off the Spanish coastlines could not secure unloading slots. According to Reuters, this has caused the country’s operators to warn about loading, as it may have to be suspended to deal with an « extraordinary scenario,» according to Reuters.
While Russia is gradually reducing gas flows, following the sanctions imposed by the West to react to its invasion of Ukraine in late February, Europ is now facing an energy supply crisis.
The region was obliged to find alternative suppliers, such as LNG. However, the arrival of several cargoes of superchilled fuel has made Europe’s shortage of « regasification capacity » exposed to the public, knowing that factories that convert the seaborne fuel back to gas are still operating at full capacity.
Those ships may seek alternate ports outside of Europe to discharge their cargo.
According to traders, analysts, and experts at LNG terminals aware of this situation, more than 35 LNG-laden vessels are drifting off Spain and around the Mediterranean, with at least eight vessels anchored off the Bay of Cadiz alone.
According to an industry source, Spain is only allocating six cargo slots at its regasification ports this week, which is less than a fifth of the number of vessels queuing off its coasts.
Spain’s national gas grid operator Enagas warned late Monday in a statement headlined “notification of the unusual operating situation” that it may have to refuse LNG unloads owing to terminal overcapacity.
Lower industrial demand as Europe’s economy slows and lower-than-expected domestic consumption in Spain due to exceptionally mild weather has exacerbated the bottlenecks.