Yamal LNG Reaches Bangladesh

Yamal LNG shipped the first cargo to Bangladesh under a long-term offtake agreement with partner Total, the Russian operator Novatek said November 29. The Arc7 tanker Eduard Toll went west from Yamal and offloaded its cargo on to a conventional tanker at Zeebrugge. That continued the journey through the Suez Canal and unloaded the LNG at the Summit LNG terminal.

Yamal LNG has been producing above its nameplate capacity of 16.5mn metric tons/year, having already exceeded that amount since January. Being in Russia's far north with very low ambient temperatures allows greater efficiencies in liquefaction. Yamal LNG has delivered 25mn mt since the start-up of Train 1 in December 2017, and has cumulatively dispatched more than 340 cargos. A fourth train of 0.9mn mt/yr is due on line this year, built with Russian technology.

Outlook bearish but with growing upside

Analysts at Marex Spectron are very bearish in the very short term but expect higher prices next month. "Short-term/spot demand for LNG is weak across the board. As it stands today there is not a single demand-related variable in our model contradicting this statement. This is likely to change in December as indicated by the proprietary Buying pressure index. Our model is picking up stronger buy-side interest which is likely to result in higher prices," they said.

That increase in demand is driven by the start of the winter season de-stocking cycle. "On the other hand, if our theory fails Europe will find itself swimming in LNG," they said.