Teesside was home to a floating LNG import facility operated by US-based Excelerate Energy between 2007 and 2015 which was decommissioned after Excelerate said it had come to the end of its “commercially viable” life.

Trafigura said in February last year it had acquired exclusive access to the site — which previously was able to send as much as 17 million cu m/d of gas directly into the UK National Transmission System — with the aim of resuming LNG imports, but there has been limited progress since.

“Teesside remains a flexible anchor position in our infrastructure portfolio and we have long-term exclusive access to this asset,” the spokesperson said.

“We have recently completed all substantive technical design and permitting work to allow the project to be constructed when market conditions allow. We remain fully committed to the project and will await the right market window to trigger the construction work to complete the terminal at Teesside,” the spokesperson said.

The UK is already home to three LNG import terminals — two in Wales near Milford Haven (Dragon and South Hook) — and the Isle of Grain import facility in southeast England.

Northwest Europe has additional LNG import capacity across the region, but the sites are chronically underused with utilization rate of around 25%.

UK gas prices are currently on a long bull run, with the UK NBP day-ahead price assessed by S&P Global Platts Thursday at 73.60 p/th or Eur27.97/MWh. By comparison, a year ago the NBP day-ahead was assessed at 46.35 p/th or Eur17.32/MWh.

Extra Flexibility
The northwest European gas market is seen as tight ahead of the upcoming winter with stocks lower year on year after strong summer demand by the power sector and on still scarce LNG imports.

A rising JKM price for deliveries into Northeast Asia means cargoes go to those markets rather than Europe.

With the loss of the UK’s only seasonal storage site at Rough last year, the move by Trafigura to look to resume imports at Teesside was seen as offering extra flexibility to the UK market.

Trafigura said last year it had already leased the terminal from operator PD Ports with plans to accommodate floating storage and regasification units.

The move to bring Teesside back into operation can also find support from long-term fundamentals, particularly the expected growth in global LNG production capacity in coming years, much to be met with supplies from the US.

The liquidity of domestic gas markets in Northwest Europe and the UK in particular make Teesside a possible destination for Atlantic-sourced cargoes, including those from the US.

It is also well placed to take cargoes from Russia’s new Yamal LNG plant given its location on the UK’s northeastern coast.

Specialized icebreakers from Yamal LNG have been stopping off at LNG terminals in Northwest Europe — especially Gate in the Netherlands and Montoir in France — for transfer to conventional LNG tankers during the winter months.

—————————-

TankTerminals.com – Research, Market and Expand Your Presence within the Tank Storage Industry. Learn more.