EUROPE

NWS venture re-enters Europe LNG market

THE Woodside-operated North West Shelf LNG operation has sold an LNG cargo to BG Group and oil trader Trafigura as part of supply run to Europe.

NWS venture re-enters Europe LNG market

"Plans by several trading companies to ship Australian LNG into Europe or the Atlantic Basin would, if successful, mark the first such arrivals since 2009, boosting regional supply," Reuters reported.

"Known as back-hauls, some traders wanted to use tankers that had discharged in Tokyo Bay and were set for a return trip into the Atlantic to pick up an Australian cargo en route," one source linked to the export project said.

"It is not known whether BG and Trafigura are eyeing Atlantic markets. The cargoes were awarded on Friday."

The move comes as European efforts to diversify away from Russian gas supply enabled this market for LNG to overtake Asian LNG prices.

"We have seen for some time traders attempting to bring Australian LNG into Europe," a separate shipping source told Reuters.

"These latest NWS cargoes would likely have been distressed had it not been for higher hub prices in Britain lifting the market," an oil major trading source said.

Cheap shipping also helps with LNG tanker rental rates which are at multi-year lows of around $50,000 a day.

It's not clear how long a worthwhile Aussie LNG trading window to Europe will be open for.

"Europe's LNG premium over Asia has narrowed to around $US0.70 per million British thermal units this week versus $1.30 per MMBtu a week ago," Reuters reported.

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