Cape of Good Hope Becomes New Route for LNG Carriers
Cape of Good Hope Becomes New Route for LNG Carriers | OilPrice.com
There are currently no tankers carrying liquefied natural gas (LNG) left in the Red Sea as shipping firms avoid the region in fear of Houthi rebel attacks.
According to an X post this morning by Oeystein Kallekle v, chief executive of LNG shipping firm Flex LNG, carriers are now being re-routed through Cape of Good Hope or deviated to other destinations.
The below picture was captured by shipping investor Ed Finley-Richardson on Twitter using shipping tracking platform Sea by Clarksons.
Other LNG carriers are represented in green.
This comes after the UK and US led a coalition of forces launching attacks on Yemen’s Houthi positions, in response to an escalation. The Houthi movement claims it is targeting ships linked to Israel, because of its military action in Gaza.
Commodities analyst for Reuters, Clyde Russell, noted yesterday that the volume of LNG affected is relatively small, and “current market dynamics are flexible enough to compensate without putting significant upward pressure on spot prices.”
LNG prices were down 2.2 per cent this morning as they return to stability following a month-long spike – 17 per cent above current levels – due to weather-induced high demand.
Prior to the escalation of Houthi attacks in the areas, insights firm GlobalData last year found that LNG is set to become a higher-trafficked fossil fuel than oil within the next five years.
By City AM
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Related Knowledge Center: Liquefied natural gas
Driven by plentiful natural gas produced from shale plays, the United States began exporting liquefied natural gas in 2016 when the Sabine Pass terminal in Louisiana opened and shipped its first cargo. Since then, additional capacity, or trains, have been added to Sabine Pass, and terminals have become operational in Cameron Parish, La.; Hackberry, La.; Cove Point, Md.; and Corpus Christi, Texas. The Energy Information Administration projects that U.S. LNG export capacity will reach 8.9 billion cubic feet per day (Bcf/d) by the end of 2019, making it the third largest in the world, behind Australia and Qatar. The tariff war with China has the potential to impact some final investment decisions for additional terminals in the coming months.