Chile to receive its first Australian LNG in 3 years amid tighter Atlantic supply

According to ship tracking data, two Australian LNG cargoes are on their way to Chile. This would be the first time in three years that Chile has received shipments of this nature.

The competition between these two 'basins' could be increased by more cargoes being sent to the Atlantic. This would also support the spot LNG price in the region.

Kpler data shows that the Gaslog Gladstone tanker, which loaded cargo at Queensland Curtis LNG terminal (QCLNG), on January 27, is expected to arrive in Quintero, Chile on February 14.

A second tanker, Barcelona Knutsen also picked up a cargo from QCLNG in February and is scheduled to arrive at Mejillones (Chile) on February 27.

Go Katayama is a principal insight analyst with Kpler. He said that Australian LNG cargoes are not usually shipped to South America because of the distances and freight costs. This makes U.S. Gulf Coast and Atlantic basin supplies more competitive in Chile and other neighbouring countries.

He said that "the movements...?appear to be a reflection of tightness and relative price dynamics in the Atlantic Basin, which could temporarily 'open arbitrage opportunities for Pacific sourced cargoes."

Portfolio optimization by suppliers may also play a part, especially when certain players in the Atlantic Basin are short or when buyers refuse to pay premiums for U.S. cargoes."

According to Kpler, Chile imports LNG in small quantities. It shipped 1.9 million tonnes of the fuel into the country last year. The last Australian LNG cargoes arrived in mid-2022.

Chile sources more than half of its LNG from Trinidad and Tobago. Some of these cargoes, however, were shipped to the U.S. in order to 'advantage record prices during a harsh winter freeze. LSEG data shows that BP and Shell - who?together own 90 %?of Trinidad’s Atlantic LNG plant - shipped gas to U.S. facilities during the winter freeze.

Ashley?Sherman is a senior analyst at Vortexa. She said that Shell has commitments to deliver in Chile. "Shell typically fulfills these from the Atlantic basin supply, which comes mainly from Trinidad." "But it recently delivered several Trinidad loads to the U.S., Canada and in response to a'surging winter demand and price.

Shell is supplying east Australia with its obligations for the?Chile.

After an Arctic Storm curtailed U.S. Exports, three LNG cargoes were shipped from Australia and Canada to Europe and Americas last month instead of Asia.

(source: Reuters)