In its four years of operation, Europe’s youngest land based large LNG regasification terminal Gate has seen the LNG market change drastically and rapidly.
Gate’s commercial manager Stefaan Adriaens explains: ‘One of the most drastic market changes happened just before we became operational. The unfortunate tsunami that hit Japan in 2011 resulted in the country idling all its nuclear power plants. Gas fired power plants had to increase their output and in Japan gas means LNG as the country for geographic reasons imports all its gas in liquid form.’
Combined with increasing LNG demand in various Asian countries this resulted in spot LNG prices rising to twice the level of European gas prices. This negative margin meant that all over Europe customers tried to minimise the imports of LNG especially as gas demand was low due to slow economic growth and the success of renewables in the power sector.
An LNG terminal needs a minimum level of LNG ship arrivals to keep the installations...