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Qatari standoff brings chaos to LNG trades

Qatari standoff brings chaos to LNG trades

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The standoff between Qatar and its Arab neighbours has seen gas shipments bound for the UK change direction. Further LNG disruption is expected and gas prices are set to rise on the back of the confusion following the Middle Eastern spat. At the start of the week a number of Arab nations cut diplomatic ties with Qatar, claiming the Middle Eastern state was funding terrorist groups.

Two Qatari LNG shipments, originally slated for the South Hook terminal in the UK, abruptly changed direction in the Gulf of Aden yesterday. The Nakilat ships Al Mafyar and Zarga made U-turns ahead of the Suez Canal and are now heading back towards their home base. The Suez Canal Authority has this week stressed that despite Egypt cutting ties with Qatar the waterway would remain open to Qatari ships. News that the gas ships had altered course saw UK natural gas futures spike nearly 4% yesterday.

“A major effect of the cut in diplomatic relationships with Qatar is likely to be felt in the shipping sector,” FGE, a London-based consultant, said in a research note Thursday. Ships travelling to and from Qatar will need to find an alternate bunkering, and LNG shipping lines will have to adjust schedules and routes, it said. “This will increase costs, and in the near term, could even lead to delays in LNG deliveries.”

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Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.

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