LONDON/DUBAI: Royal Dutch Shell has sent a replacement cargo of liquefied natural gas (LNG) from the US to Dubai, shipping data shows, after a diplomatic row disrupted typical trade routes from Qatar, the world鈥檚 biggest producer.
Shell has a deal to supply the Dubai Supply Authority (DUSUP) with LNG which it typically sources from Qatar because of its proximity.
But bans on Qatari vessels entering ports in the UAE, imposed after top Arab powers severed diplomatic and transport links with Qatar on Monday, meant it had to source the LNG from elsewhere.
The Maran Gas Amphipolis tanker, carrying around 163,500 cubic meters of LNG produced in the US, was initially headed toward Kuwait鈥檚 port of Mina Al-Ahmadi but made a U-turn on Wednesday to head for Dubai鈥檚 port of Jebel Ali.
The tanker is currently unloading at DUSUP鈥檚 floating import terminal at Jebel Ali, data showed.
As exclusion zones took effect, Qatar鈥檚 fleet of LNG vessels anchored off the UAE鈥檚 port in Fujairah prior to the diplomatic cut-off have moved out. They are currently clustered offshore Qatar鈥檚 LNG export facility at Ras Laffan.
Since Monday the number of LNG tankers there has risen to 17 from seven, shipping data shows.
The queue reflects the impact of port exclusions as production from the export plant shows no signs of slowdown, an analyst said.
Meanwhile, a Pakistani Cabinet minister says Islamabad will continue to import LNG from Qatar under a 15-year agreement, despite the severing of diplomatic ties with Qatar by 萝莉视频 and some other countries.
Shahid Khaqan Abbasi, the federal minister for Petroleum and Natural Resources, said Qatar and Pakistan last year signed a $1 billion agreement, under which Qatar鈥檚 Liquefied Gas Company Limited will sell LNG from 2016 to year 2031 to state-run Pakistan State Oil.
He said since no sanctions have been imposed on Qatar by the UN, Pakistan and Qatar were bound to abide by the agreement.
In another development, Abu Dhabi Petroleum Ports Authority has re-imposed a ban on oil tankers linked to Qatar calling at ports in the UAE, reversing an earlier decision to ease restrictions, and potentially creating a logjam of crude cargoes.
The port authority circular was issued late on Wednesday and seen by Reuters on Thursday. It states: 鈥淒enial of entry into any of the petroleum ports, for all vessels arriving from, or destined to Qatar, regardless of its flag.鈥� That was followed by a notice from the UAE鈥檚 state-owned Abu Dhabi National Oil Company (ADNOC) on Thursday with the same language also seen by Reuters.
The ban on all vessels carrying the Qatari flag and vessels owned or operated by Qatar remains in place and those ships will not be allowed into its petroleum ports, the port authority circulars said.
The Abu Dhabi port authorities had eased the restrictions just a day earlier.
The ban would potentially disrupt the common industry practice of co-loading oil cargoes from different countries onto a tanker to lower the costs of shipping. Preventing the co-loading of Qatari and other Middle East grades could add to refiners鈥� transport costs and create logistical jams.
鈥淎DNOC has officially confirmed that we cannot co-load to and from (Qatar). So we need to find new vessels, then find co-loadings around the region,鈥� said a source from an Asian refiner.
Qatar is among the smallest of the Middle Eastern oil producers and refiners will load crude from there alongside bigger suppliers such as 萝莉视频, the world鈥檚 biggest crude exporter, and the UAE.
鈥淭his is the only thing that really matters 鈥� Qatar doesn鈥檛 have that many vessels and most of their exports are co-loaded with other crudes,鈥� the second shipbroker said.
Despite the official ban, industry sources in both the Middle East and Asia indicated that the co-loading of Abu Dhabi crude along with Qatari oil may continue on a case-by-case basis.
Customers under long-term contracts with ADNOC for crude may be given exemptions to the ban at ports including Das Island and Fujairah as long as the co-loaded cargo is not only from Qatar since ADNOC does want to upset those customers, said a Middle East-based industry source.
Traders and refiners may explore alternatives like chartering smaller tankers or consider ship-to-ship (STS) transfers in the region to deal with the ban.
鈥淚t鈥檚 gotten to the point where we just want this to be over... we are scrambling again,鈥� said a second Singapore-based shipbroker, adding that STS transfers could occur at designated areas offshore Oman.
Shell diverts US LNG cargo to Dubai after Qatar diplomatic row
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