Very Large Gas Carriers (VLGCs) Cross Atlantic From U.S. Gulf

(December 11, 2017) — S&P Global Platts writes that flows of LPG from the U.S. Gulf Coast to Northwest Europe (NWE) are expected to reach about 148,000 metric tons—1.73 MMbbl—in the first two weeks of this month. Landed volumes over the course of November 2017 were about 188,000 metric tons, which included cargos delivered by two very large gas carriers (VLGCs). VLGCs crossing the Atlantic from the U.S. Gulf Coast to Northwest Europe more commonly serve the propane market in the region, where the fuel is used for inland heating during winter and as a petrochemical feedstock.

Platts reports that, according to NWE traders and brokers, the arbitrage from the U.S. to Europe has been largely closed since mid-spring of this year, narrowing the stream of vessels making the journey almost exclusively to term contract cargos, which are understood to be going toward petrochemical buyers. The market intelligence service notes that restricted supply helped support the cost-insurance-freight (cif) NWE large-cargo market for propane at unseasonal highs throughout the summer when prices typically fall on a lack of heating demand, despite what traders describe as weak buying interest for inland Europe.

The December 2017 arrivals include two VLGCs, according to Platts. The Providence left Houston on Nov. 28 and was expected to arrive in Flushing, Netherlands, on Dec. 11. The Crystal Marine left Freeport, Texas Nov. 30 and was expected in Flushing on Dec. 12. Three smaller vessels, the Seasurfer, Gaschem Orca, and Kortrijk, were also said to be on route from Houston to Flushing and were expected before mid-December.

(SOURCE: The Weekly Propane Newsletter, December 11, 2017)