Oslo — A tanker seeking to fill up liquefied natural gas (LNG) at a terminal in Egypt left empty and diverted to another port, after an Israeli pipeline supplying gas was halted due to Israel-Hamas conflict, analysts said on Thursday.
The Seapeak Catalunya tanker has changed course from Egypt’s Idku LNG plant and is now heading to the Algeria’s Arzew LNG facility instead, LSEG analyst Olumide Ajayi said citing shipping data.
Chevron has shut down the Israeli Tamar gas field amid the military conflict in the country and suspended exports through the subsea EMG pipeline, which runs from Ashkelon in southern Israel to Egypt.
Egypt relies on Israeli gas imports to meet some of its domestic demand and therefore the pipeline cuts mean there is less gas available for LNG exports, Ajayi said.
This year to-date, 50% of Egyptian exports have been sold into the European Union and Britain, based on LSEG ship-tracking data, he added.
However, the country has not exported any LNG since July amid high domestic demand this summer and was only set to resume exports in October.
Egypt imports about 7 billion cubic feet per year of natural gas from the Israeli Tamar and Leviathan gas fields, according to data from consultancy Rystad Energy.
Egypt exported 3.7 million tonnes of LNG between Oct. 2022 and Jan. 2023, hitting a high of just below 1 million tonnes in Dec. 2022, the firm said in a note.
The ongoing conflict is likely to have a limited impact on prompt European gas prices given current mild weather, full storages and the potential for more U.S. LNG imports, Aditya Saraswat, head of Middle East upstream research at Rystad Energy said.
“However, there remains a risk of escalation into a broader conflict that could cause a short-term increase in energy prices,” Saraswat said.
The front-month Dutch TTF hub contract, the European benchmark, was trading 3.4% lower on Thursday at 47.80 euros per megawatt hour, but still some 25% higher than before the Israel-Hamas conflict.
Reporting by Nora Buli in Oslo; additional reporting by Marwa Rashad; editing by Nina Chestney – Reuters
