March 4, 2022

Yamal LNG vessels destined for European ports await orders; diversions eyed

A few laden Yamal LNG-chartered vessels that were earlier signalling their arrival at ports in France and Spain are waiting for orders to sail to new destinations suggesting a pre-emptive move by Yamal LNG ahead of a possible ban by the EU on Russian ships entering its ports.

Kpler data show that the Boris Davydov, Nikolay Urvantsev and Boris Vilkitsky LNG tankers changed their destination status on Mar. 1, 2 and 3, respectively. Boris Davydov loaded at Yamal LNG on Feb. 27 and was due to discharge its cargo at France’s 9.6 mtpa Dunkerque LNG receiving terminal on Mar. 7. Nikolay Urvantsev was due to arrive at Spain’s 5.1 mtpa Bilbao LNG receiving terminal after loading at Yamal on Feb. 28. And Boris Vilkitsky loaded at Yamal on Feb. 24 and was initially scheduled to deliver its cargo at France’s 8 mtpa Montoir LNG receiving facility on Mar. 5.

The EU is expected to announce a ban on Russian ships, having already closed its airspace to aircraft with Russian connections as a part of a raft of restrictive economic and financial sanctions imposed against Russia for its invasion of Ukraine. The shutting of its ports would follow the UK’s lead. The UK announced on Mar. 1 that it has barred ships that are registered in Russia, owned or chartered by Russian entities or carry the Russian flag from entering its ports. And it is the only country to have done this so far.

Two Yamal LNG ships initially intending to arrive at the UK’s 14.4 mtpa Grain terminal have changed course this week in the wake of the ban.

Russian gas producer Novatek has a majority stake of 50.1% in the Yamal LNG joint venture, which operates the 17.4 mtpa plant of the same name in Russia’s Yamal peninsula. Partners in the venture include Total and state-owned China National Petroleum Corp. with respective stakes of 20%, each and the China Silk Road Fund with a 9.9% share.

The UK’s ban had raised supply concerns as industry participants had thought it extended to the cargoes carried. The  UK Department for Transport’s clarification that the ban covers only ships and not cargoes provides leeway for Russian LNG to still enter the UK on non-Russian ships. This would mean that Yamal LNG cargoes carried on board any of the vessels it has under charter would have to be transshipped to non-Russian LNG vessels before heading to the UK.

Yamal LNG vessels have typically carried out ship-to-ship transfers with other vessels at the 6.6 mtpa Zeebrugge LNG terminal in Belgium. But, the prospect of an EU-wide port ban on Russian ships raises the question as to where transshipments would take place instead and how the UK and Europe would receive Russian LNG. Yamal LNG has around 25 ships under term charter agreements, including 15 ice-class carriers.

But, Yamal LNG-chartered carriers could still ship cargoes to Asia, market participants said. Yamal shipped 1.67mt, or 23 cargoes in February, of which Europe accounted for 74.25%, or 18 cargoes and Asia accounted for the remainder. But they suggested the longer voyages to Asia could mean that Yamal might have to scale back output if it doesn't have sufficient vessels to lift cargoes. It takes around 34 days to sail to Tianjin in China via the Suez Canal or around 15 days via the Northern Sea Route from Yamal, compared to around eight days to Zeebrugge, based on a sailing speed of 17 knots, Kpler data show.

China’s state-owned CNPC already has a long-term contract to receive Yamal LNG cargoes, and the country’s foreign ministry spokesperson Wang Wenbin said earlier this week that China would continue to conduct normal trade relations with Russia. This was amid discussions among other governments to embargo Russian oil and gas exports.

The Yamal LNG-chartered Christophe de Margerie LNG tanker was the first of two Yamal LNG vessels to divert from the UK. The vessel changed course from the UK’s 14.3 mtpa Grain terminal to the 8 mtpa Montoir LNG receiving terminal in France on Feb. 28, when UK Secretary of State for Transport Grant Schapps instructed UK ports to ban access to Russian-linked ships. Christophe de Margerie is also owned by Russia’s largest shipping firm, Sovcomflot, against which the US Treasury has imposed measures to prevent it from raising funds in the US.

The orders for Christophe de Margerie have changed since Feb. 28, with the vessel expected to call at the 8.8 mtpa Gate terminal in Rotterdam on Mar. 5, Kpler data show.

The 172,000 m3 Fedor Litke was the second Yamal LNG vessel to divert from the UK. It was initially due to arrive at Grain on Mar. 6. But it changed its status to waiting for orders on Mar. 1, when the UK ban on Russian ships became law, based on Kpler data. The vessel yesterday showed an arrival at Zeebrugge on Mar. 6 but is awaiting new orders again, Kpler data show. Fedor Litke is owned by Greek shipper Dynagas and Chinese firms Sinotrans and China LNG.

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