Ships used as “floating gas storage” to avoid Ukraine risk

Prices for UK gas could be boosted if tanker owners use their ships as floating storage for liquefied natural gas (LNG). The possibility of the move on the back of fighting […]

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By Vicky Ellis

Prices for UK gas could be boosted if tanker owners use their ships as floating storage for liquefied natural gas (LNG).

The possibility of the move on the back of fighting in eastern Ukraine was noted in a daily market report today.

Steven Walker, Client Portfolio Manager at npower said: “News yesterday of some LNG players potentially using tankers as floating storage to hedge some of their Ukrainian risk is fairly interesting, [it] could tighten shipping markets there.”

 

Generally LNG ships come to the UK from Qatar, sometimes Algeria. Recently such LNG shipments have been going to Asia but a mild summer over there means prices have been lower, so waiting off the coast could bag them a better price, market analysts told ELN.

Fighting in Iraq also saw the price of Brent crude oil for September gain more than a dollar, according to Mr Walker: “Brent climbed for a second day after US President Barack Obama authorised air strikes in Iraq.”

Attacks from ISIS militants threaten what has been described as an effective “genocide” of thousands of followers of the Yazidi religion in the Kurdish northern region of Iraq. The United States is planning limited air strikes.

Iraq is the second biggest oil producer among OPEC countries.