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Jun 23, 2022
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Gas is evaporating and getting more expensive

Gas is evaporating and getting more expensive

Photo: Yuri Smityuk/TASS

Paraphrasing a Russian proverb and remembering to stock up on gas in the summer, some European politicians have begun to show signs of concern about fuel supplies. Thus, the Minister of Energy of the Netherlands Rob Yetten has already warned that there may not be enough gas in the coming winter if “additional measures” are not taken, RBC reports. According to him, “general supplies from Russia to Europe are rapidly drying up” and at present “almost every cubic meter of gas is on the account.”

As for “additional measures”, Yetten has named only one so far – fuel economy by companies and households, including in the summer.

It should be noted that the decrease in gas supplies from the Russian Federation coincided with an unpleasant drop in Europe’s exports of liquefied natural gas (LNG) from the United States, where an export terminal in Texas was recently severely damaged as a result of a fire. In general, the hope for LNG supplies from the States and Qatar looks like a straw that European leaders grab at in the hope of saving their economy that has begun to sink.

Meanwhile, LNG has a number of properties that are unpleasant for Europe – it is more expensive than pipelines and, moreover, requires additional efforts for delivery and subsequent conversion for economic needs at special regasification terminals. Finally, this type of gas can evaporate during transportation, which was previously reported to SP by the General Director of CJSC InfoTEK-Terminal, a leading expert of the Union of Oil and Gas Producers of Russia Rustam Tankaev.

True, there is no consensus on what proportion of blue fuel is lost in the process of delivery to the destination. So, Deputy Director of the National Energy Security Fund Aleksey Grivach reported “SP” that the total loss of LNG can reach 15-20%.

“But this share can be lost not only during transportation,” he specified. – Part of the gas is spent on the so-called technical needs, which, of course, are included in the cost of the product.

Candidate of Technical Sciences, Senior Researcher, Krylov State Research Center Oleg Tarovik told “SP” that the distance for the delivery of liquefied natural gas from the United States and Qatar is not fundamentally different.

– In fact, the crossing distance is approximately the same and is about 5,000 nautical miles, depending on the port of departure and destination. The average operating speed of offshore LNG carriers is about 16 knots, which means a journey time of approximately 12.5 days. With a gas carrier capacity of about 140-170 thousand cubic meters, this is the most common size, for definiteness we will take 150 thousand cubic meters, daily cargo losses are about 0.15%.

“SP”: – Not so much comes out already …

– Then the total loss from evaporation in one transition will be about 2800 cubic meters or 1320 tons. That is, it will not depend very much on whether LNG is being transported from Qatar or from the United States. In addition, it is worth considering that the route from Qatar goes in the pirate-prone waters of the Gulf of Aden, which, you see, has its own nuances.

SP: Absolutely.

– You also need to understand that the indicated volumes of steam are not losses as such. The fact is that many LNG carriers use cargo as fuel. So, almost the entire volume of steam will be spent in the ship’s power plant.

If the gas carrier cannot consume LNG (there are such vessels), then it will have a reliquefaction unit that liquefies all the evaporated gas.

As for gas losses, as Aleksey Grivach noted, the contracts being signed take into account such nuances.

“Consumers buy the finished product and pay for it either before delivery or after receipt – there may be different options here. And they try to foresee this in the signed documents – no one wants to overpay. However, one should not forget that losses of a different nature are possible only with LNG, but also with pipeline gas – in particular, during transportation.

And the volume of gas pumped into the pipes and coming to the consumer is not the same. Moreover, after delivery to the buyer, it is distributed to the end user through pipes. This applies to pipeline gas and LNG, which is also regasified. In general, there are some features here. Of course, the whole cycle has already been worked out to the smallest detail, but you should not forget about it.

SP: How seriously do LNG losses affect the gas market in this segment?

— Of course, the main problems of this market today are not the loss of LNG, but the lack of additional capacity. In connection with well-known events, rather significant volumes of gas are indeed being redirected to Europe at the present time. Because prices on the continent are rising and gas traders are trying to make money by increasing purchases in order to send raw materials to the European market. But this happens when there is excess fuel.

“SP”: – In what cases does this happen?

They can appear for a number of reasons. For example, when there was a lockdown in China and the consumption of energy resources, including gas, decreased. It may also fall due to weather conditions. In addition, at present in Asia, some not very rich states, of course, cannot buy gas at prices comparable to Europe. These countries are forced to save money and refuse to purchase some volumes of gas. There may be different options.

“SP”: – Are they trying to solve the problem by increasing the volume of the gas market?

– So far, we can say that the total volume of fuel on the market is practically not growing. Of course, some players are trying to increase it, but so far it hasn’t worked out too well. Moreover, the fire at gas terminals in the US even caused some decline.

But at the same time, one should not forget that if a cooling occurs in Asia, this will lead to the fact that there may not be surpluses in the local gas market zone. However, here, of course, a lot will depend on traders selling fuel from manufacturers …

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