The Dunkirk liquefied natural gas terminal in France received its first cargo on Friday [08/07], boosting the nation’s import installations for the fuel to four, just as a wave of new supply hits the market.
Madrid Spirit, a 285-meter-long tanker, delivered a commissioning cargo from Nigeria, Electricite de France SA, which owns 65 percent of the project known as Dunkerque LNG, said in an e-mailed statement. A second tanker will arrive next month and the terminal will be tested before it starts commercial operations at the end of September.
The opening of the terminal in the English Channel near Belgium coincides with more LNG tankers heading for Europe after demand waned elsewhere and prices for the fuel slumped. European LNG imports are forecast to rise about 13 percent this year to 45 million metric tons, according to Energy Aspects Ltd., an industry consultant in London.
A global glut of the fuel is expected to peak in 2020 with production capacity exceeding demand by 29 percent, Bloomberg New Energy Finance said last month in its Global LNG Market Outlook.
Dunkirk will receive about 20 percent of all the gas consumed in France and Belgium, according to EDF’s website. Gas from the terminal can be supplied to Belgium and northwest Europe via a newly-built pipeline. The terminal’s other shareholders are Fluxys SA and Total SA. Construction of the facility started in 2011.
Gas for next-month delivery at U.K.’s National Balancing Point, Europe’s benchmark, fell 26 percent in the past two years, ICE Futures Europe data show. Spot prices in northeast Asia, the world’s biggest LNG importing region, crashed 49 percent in the same period, according to the World Gas Intelligence publication in New York.
Sliding prices in Asia may mean an increase in utilization rates at European terminals. Usage averaged 25 percent in 2015, ranging between 7 percent and and 54 percent by country, according to the International Gas Union’s annual LNG report.