Qatar and UAE Turn to Rare LNG Ship Transfers as Hormuz Crisis Drags On

Three LNG carriers loaded from Qatar and the United Arab Emirates in the Persian Gulf have transferred their cargoes onto other vessels outside the Strait of Hormuz in the past month, a move that’s highly unusual for LNG cargoes but one that could raise the crippled LNG shipments from the region.

LNG traffic at the Strait of Hormuz nevertheless remains at a standstill, even though oil flows are estimated to have rebounded in recent weeks.

However, unlike crude oil, it’s much more difficult to shuttle-ship LNG through Hormuz and then reload it via a ship-to-ship (STS) transfer as Persian Gulf producers, including Qatar, have been doing in recent months to ship oil to customers.

The UAE and Qatar appear to have done this with three LNG cargoes in August, Reuters reported on Wednesday, citing vessel-tracking data from Vortexa and Kpler.

The three LNG carriers in question include Greek-owned GasLog Shanghai, which was involved in an “incident” in the Strait of Hormuz at the end of July, and transferred its cargo onto GasLog Savannah offshore Oman outside the Strait in late August.

Qatar-owned Al Rekayyat, hit by a projectile near the Strait of Hormuz in early July, also conducted an STS transfer with Qatar-owned tanker Tembek in mid-August, according to the data compiled by Reuters. The cargo on the Tembek was delivered to India on August 31.

ADNOC’s Mraweh LNG carrier also made an STS onto LNG Enugu outside the Strait offshore Oman in the middle of August, and is en route to deliver the cargo to Japan, according to the data.

The lack of meaningful recovery of LNG flows from the Persian Gulf and Qatar’s extended force majeure on deliveries combined with the U.S.-Iran re-escalation to hike Asia’s spot LNG prices to a five-month high and Europe’s benchmark natural gas prices to a three-and-a-half-year high this week.

By Tsvetana Paraskova for Oilprice.com

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