Dozens of ships carrying LNG are circling off the coasts of Spain and other European countries, not able to secure slots to unload because plants that convert the fuel back to gas are full.
ccording to Reuters, there are more than 35 LNG-laden vessels drifting off Spain and around the Mediterranean, with at least eight vessels anchored off the Bay of Cadiz alone.
Now, the congestion of cargoes has raised concerns about Europe’s ability to process the LNG supplies needed to deal with the lack of Russian pipeline supply.
More specifically, Spain is offering just six slots at its regasification terminals for cargoes this week, which is less than a fifth of the number of vessels queuing off its coasts. The country has six terminals in total.
Additionally, there are also LNG vessels at anchor near other European countries which could lead to dozens more ships waiting.
The shortage of regasification plants, or pipelines connecting countries that have those facilities to other European markets, means that the LNG floating offshore cannot be used.
Commenting on the situation, Alex Froley, LNG analyst at data intelligence firm ICIS, explained that “we have seen a high number of cargoes waiting offshore in southern Spain or circling in the Med, as well as some cargoes waiting off the UK.”
He further added that another reason for the congestion is that prices are expected to increase as winter approaches and heating demand increases. This could make some ships wait to sell their cargoes at a higher price that can offset the extra shipping costs incurred by sitting offshore.