LONDON (Reuters) - Britain’s imports of liquefied natural gas (LNG) for March are at their highest levels since October 2015, helping British wholesale gas prices slide to a more than 18-month low.
Britain is set to receive 14 cargoes in March, with six tankers scheduled for this week. The country is on track to import 1.18 million tonnes of LNG this month, amounting to 1.63 billion cubic metres of gas or 52 million cubic metres a day.
The influx of LNG follows a large boost in supplies in the past half a year, mainly from the United States and Russia, and subdued demand in Asia, sending more cargoes to European shores.
This has weighed heavily on wholesale gas prices in Britain which have halved since a September peak of 80 pence per therm. This is especially unusual as prices tend to rise in winter when gas is used for heating.
On Monday, day-ahead wholesale gas prices were 37.80 pence per therm, with six LNG tankers converging on Britain’s three import terminals this week.
Consistently high send-out rates of regasified gas into the pipeline system over the past six months has also increased the share of LNG in total gas supply to almost 30 percent in March from rates as low as 2 percent in December 2017.
The LNG industry is being transformed as long-awaited supplies from the United States start to come onstream with the commissioning of new production and export facilities.
Russian LNG from the Arctic Yamal facility, which opened in December 2017, has also changed the European energy landscape.
Qatar, Britain’s dominant historical supplier, remains the top LNG producer in the world but will have to expand production capacity in coming years to keep the top spot.
The proliferation in LNG supply, as well as more flexible supply contracts and pricing mechanisms, has diluted Qatar’s share of British LNG supplies to 34 percent so far this year, from 39 percent last year and 87 percent in 2017.
Reporting by Sabina Zawadzki; Editing by Edmund Blair
Our Standards: The Thomson Reuters Trust Principles.