Spain’s gas storage facilities are full. So full that a number of giant liquefied gas tankers that supply the southern European country with fuel cannot unload their cargo and are dammed up in front of the port terminals on the Spanish coast. In the bay of the southern Spanish Atlantic city of Cádiz alone there are 15 gas tankers, reports Spain’s public television station TVE. At least 35 gas ships are said to be waiting around the Iberian Peninsula and in the Mediterranean Sea.
Not far from Cádiz, in the port city of Huelva, there is one of those gas terminals where ships up to 300 meters long can unload their cargo. Spain has a total of six terminals with attached depots.
A seventh system will soon be put into operation in the Atlantic port of Gijón. In the terminals, the liquefied natural gas (LNG) used for shipping is converted back into its gaseous state so that it can be transported further in pipelines.
According to the national gas network operator Enagas, Spain has a third of all liquid gas capacities and 45 percent of the total LNG storage space in the EU with its plants. But even this largest LNG infrastructure in Europe is currently overloaded – with the result that tankers have to be turned away.
The background to the tanker jam is, on the one hand, overbooking of an unexpected kind: In view of concerns about an energy shortage in the wake of the Russian war in Ukraine, the Spanish energy companies increased their gas orders in the spring and summer.
As a result, more and more LNG tankers have arrived in Spain in recent months. From January to the end of September, more than 250 giant tankers were unloaded in Spain – as many as in the whole of last year.
But at the same time, demand in the country fell. According to the network operator Enagas, almost seven percent less gas was used in September than in the same month last year.
“Demand is currently falling because the weather is still relatively mild, reserves are at an all-time high and economic activity is slowing down,” said Pablo Gil, Spanish analyst at international brokerage firm XTB. Energy-saving measures are also noticeable.
“There will be an imbalance between scheduled deliveries and demand in October,” Enagas said. “This situation in Spain is not unique in Europe, but is also happening in other countries.”
Enagas predicts that this oversupply will probably continue until November. The unloading dates of the tankers would therefore have to be postponed – until storage capacities were free again.
But not all tankers anchored off the coast have already sold their cargo. Quite a few tankers have set sail from the gas exporting countries USA, Algeria or Nigeria without a fixed destination and are now waiting for gas demand to rise again and for them to receive an attractive offer for their cargo.
James Waddell, energy expert at the British consulting firm Energy Aspects, assumes that the demand for gas will increase significantly with the cold season: “We will need more gas during the heating period in November, December and January,” Waddell told DW .
Wholesale market prices, which are subject to large fluctuations, are currently at a comparatively low level, said Waddell. But that will probably change again, so that the waiting time for the tankers could be worthwhile for the gas traders. Waddel expects “much higher gas prices in Europe” in winter.
Waddell points out that good networking of the European energy system can help to transfer overcapacity, such as that currently existing in Spain, to other countries. But there are still gaps in the pipeline network, for example between Spain and France.
Madrid, Lisbon and Berlin have long advocated the construction of a powerful gas pipeline from the Iberian Peninsula to southern France. In France, the pipeline, which has been under discussion for ten years under the project name MidCat, is to be connected to the European transmission network. In the future, the line should also be able to transport hydrogen.
Paris rejects the MidCat pipeline because of doubts about its economic viability. But the last word may not have been spoken yet. The pipeline was also an issue when Chancellor Olaf Scholz visited Spain some time ago. In addition, discreet negotiations are underway, in which, in order to lure France on board, the focus is on the promising hydrogen and not gas transport.
Portugal’s Prime Minister António Costa, who, together with Spain’s Prime Minister Pedro Sánchez, wants to convince French President Emmanuel Macron of the point of the project, is optimistic: “There will be a cross-border connection,” he said recently. “But the project will no longer be called MidCat, it will be given a new name.”
Author: Ralph Schulze (Madrid)
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The original of this article “Tanker traffic jams in front of Spain’s liquid gas terminals” comes from Deutsche Welle.
