Azernews.Az

By Bloomberg

France’s fourth terminal for importing liquefied natural gas is set to start operating by the end of the year as European demand for the super-chilled fuel recovers.

The Dunkerque LNG terminal will receive its commissioning cargo from majority owner Electricite de France SA by the end of October, Marc Girard, president of Dunkerque LNG SAS, said Wednesday in an interview at the World Gas Conference in Paris. The project is on time and in line with its budget, he said.

The terminal, near the Belgian border, is poised to go into operation as LNG tankers head to Europe after demand waned elsewhere. A price premium that drew cargoes of the fuel to leading global consumer Asia disappeared in February. Terminal utilization in Europe is set to improve this year amid greater LNG supply and lower prices, the International Gas Union said in its latest World LNG Report.

“The market is far better than a year ago,” Girard said. “When the decision was taken in 2011, the market was already in a difficult situation, but the decision was taken in the counter-cycle, which is absolutely normal when you see the profile of the shareholders. They invest in the long term.”

EDF holds a 65 percent stake in Dunkerque LNG. Fluxys SA, which operates European gas pipelines, has a 25 percent holding and Total SA, Europe’s third-largest oil company, owns the remaining 10 percent.

Capacity Sale

EDF is also Dunkerque LNG’s biggest customer, contracting for 8 billion cubic meters (282 billion cubic feet) of capacity. Total holds 2 billion cubic meters, and the remaining 3 billion cubic meters will be sold on the market after the terminal has been commissioned, Girard said.

The average LNG terminal utilization rate in Europe dropped to 22 percent last year amid competition from pipeline gas, according to the IGU, which represents members including the American Gas Association. That compares with 26 percent in 2013 and 35 percent a year earlier.

“While there remain concerns about the lack of demand that has defined the European regasification market for the past four years, as of early 2015, importers in Europe are expected to again benefit from a more favorable LNG supply and price environment,” the IGU said.

LNG send-out from European terminals rose about 45 percent in 2015’s first four months from a year earlier, according to Gas Infrastructure Europe’s GLE unit.

The delivery date for Dunkerque LNG’s first cargo will be confirmed at the end of June, Girard said. France receives cargoes now at the Fos Cavaou and Fos Tonkin terminals on the Mediterranean Sea and Montoir-de-Bretagne on the Atlantic coast.

Dunkerque LNG will be able to receive 120 tankers a year and potentially as many as 150, according to Girard. It can handle vessels with capacities from 65,000 cubic meters to the biggest carriers, so-called Q-Max ships, he said. Once in operation, the terminal may expand into services such as small- scale LNG cargoes, Girard said.