09/22 Closing prices / revised 09/25/2023 08:35 GMT  |    09/22    OPEC Basket    95.73        +0.72    |    09/22   Mexico Basket (MME)   $86.99  +0.20 06/23  Venezuela Basket (Merey) $57.37  + 1.15 ( from previous month)  (Est. OPEC)  | 09/22    NYMEX WTI Texas Intermediate  October  CLV23  $90.03     +0.40  | 09/22    ICE Brent November  BRNX23   $93.27   -0.03 | 09/22    NYMEX Gasoline October  RBV23    $2.56    -0.05   09/22    NYMEX  Heating Oil  October HOV23   $3.37     +1.2%   |  09/22    Natural Gas November NGX23    $2.63      +0.02%    09/22   Active U.S. Rig Count (Oil & Gas)    630      -11 | 09/25    USD/MXN Mexican Peso   17.2265  Live data  | 09/25      EUR/USD  1.0632    Live data  | 09/25   US/Bs. (Bolivar)      $33.9912000  ( data BCV)    |

The New Battleships in Europe’s Energy War Are in Short Supply (video) – WSJ

The world’s tiny fleet of floating storage and regasification vessels is suddenly in high demand as the EU rushes to import more LNG

An LNG terminal in Germany. Floating storage and regasification units can be hooked up to existing ports, where they convert slushy LNG back into gas. (Hauke-Christian Ditteich/Zuma)

Carol Ryan, WSJ

EnergiesNet.com 11 01 2022

Regasification ships are critical in Europe’s energy war with Russia. That is hard luck for other regions that were counting on them for their own power needs.

Europe has been hoovering up floating storage and regasification units, known as FSRUs, since the Kremlin cut flows of Russian pipeline gas to the continent this summer. These ships can help countries to quickly boost their ability to import liquefied natural gas but there are only 50 in the world.

FSRUs are hooked up to existing ports, where they convert slushy LNG back into gas that is then pumped into connecting pipelines onshore. These ships can be constructed from scratch in around half the time of a permanent onshore gas terminal and at 60% of the cost. This has made them particularly appealing to cash-strapped governments in developing countries. 

Brussels now sees them as part of the solution to its energy crisis. The European Union needs to cut its exposure to Russian gas fast but eventually also transition away from LNG to cleaner forms of energy: The bloc wants renewables such as wind and solar to be at least 40% of its energy mix by 2030. Renting an FSRU is the perfect stopgap.

Why Natural Gas Tankers Are Lining Up Off Europe's Coast
Watch video: Tankers carrying liquefied natural gas are floating off Europe’s coast, waiting for the price of the fuel to rise. WSJ’s Joe Wallace explains how the tankers are Europe’s attempt to address the energy shortage and what it might mean for the continent this winter. Photo Illustration: Alexander Hotz/WSJ

While Spain and the U.K. have good LNG import capacity, Germany and the Netherlands have traditionally relied on pipeline gas from Russia and need to improve their ability to receive cargoes by sea. The Netherlands is installing two FSRU vessels at its Eemshaven port that should be able to handle 8 billion cubic meters of imports a year when they are fully up and running. Along with the expansion of an existing LNG import terminal in Rotterdam, the country will have doubled its import capacity since the energy crisis began.

Germany has chartered around six FSRUs and is currently installing one at Lubmin—close to the port where flows from Russia’s Nord Stream pipeline used to arrive. These and other port expansion projects should boost the EU’s overall LNG regasification capacity by 15% for this winter. Since Russia’s invasion of Ukraine, 21 FSRUs have been secured or are needed for different facilities across the EU over the next few years, according to the International Energy Agency. 

It marks a turnaround for owners of these previously sleepy vessels. Last year, the cost of chartering one of these ships was just $100,000 a day and demand was thin enough that a number of vessels were put to work ferrying LNG from A to B rather than regasifying cargoes. Day rates have doubled over the past 12 months and should stay high. Supply will remain tight as shipyards in South Korea, where they are usually made, are booked up for several years. 

Since it went public in April this year, shares in Excelerate Energy, which owns a fifth of the world’s FSRU vessels, have gained 20%. Its ships were meant to play a key role in opening up new LNG markets in countries such as Pakistan. It now expects to send more ships to Europe. Another U.S.-based company, New Fortress Energy, owns one of the FSRUs currently being installed in the Netherlands. 

As the weather cools, LNG prices in Europe are rising again after substantial declines this fall. The region’s thirst for the commodity has already priced out developing countries, who must rely on dirty fuels such as coal for longer than planned. But even if prices come down, the FSRUs they need to import gas are setting sail for Europe.

Write to Carol Ryan at carol.ryan@wsj.com

Appeared in the December 2, 2022, print edition as ‘New Battleships in Europe’s Energy War Are Scarce’.

Share this news

Support EnergiesNet.com

By Elio Ohep · Launched in 1999 under Petroleumworld.com

Information & News on Latin America’s Energy, Oil, Gas, Renewables, Climate, Technology, Politics and Social issues

Contact : editor@petroleuworld.com

CopyRight©1999-2021, EnergiesNet.com™  / Elio Ohep – All rights reserved

This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission fromPetroleumworld or the copyright owner of the material.

Scroll to Top