Greece imports no LNG in April for first time in five years

Greece has imported no LNG in April for the first time in five years, as gas prices in the region have made LNG uneconomical.

The country has imported anywhere between 34,000 mt and 336,000 mt of LNG per month in the past five years, according to S&P Global Commodity Insights data.

Greece imported 67,000 mt in April 2021 to 103,000 mt in Aril 2022 and 157,000 mt in April 2023.

Cargo Cancellations

Players in the region had planned at one stage on importing somewhere around three cargoes in the month, according to Desfa's Annual LNG Unloading Plan, but that was scaled back in subsequent revisions.

Mytilineos was expected to import 1 TWh LNG on April 6, followed by 0.5 TWh by Kolmar on April 12 and another 1 TWh by MET on April 22. In a later revision of the plan, the volumes remained constant, but the Kolmar slot was replaced by Mytilineos. In further revision, the April 22 cargo was cancelled. Later, the April 6 and April 12 volumes were altered down to 0.02 TWh each. In the final revision, the two remaining cargoes were also cancelled.

The cargo cancellations and reduction in nominated quantities in Greece entailed a cost, according to a source familiar with the matter. The monthly unloading program is announced 45 days before the start of the month. If the cancellation is made prior to that, there is no penalty. However, cancellations for the period from 45 days until the delivery date could entail a fee ranging between 5%-20% of the cargo size, according to the trader.

The trend of cargo cancellations in Greece has preceded April. LNG nominations for February were revised down from five cargoes to two cargoes and that of March was reduced to two from four.

In the first quarter of 2024, Greece imported around 522,000 mt of LNG, down 18% year on year, according to S&P data.

Pipeline gas fulfilling low shoulder season demand

The fall in LNG volume for the month could be attributed to the low demand in the region during shoulder season which is being fulfilled by the relatively cheaper gas imports, according to market sources.

"Pipeline gas is much cheaper now and the region is very long," said a Mediterranean based trader. "Balkan Gas Hub is trading between Eur21-23/MWh this month. And most of the mid to long terms contracts with wholesale suppliers have a discount of 4%-5% to TTF."

"It does not make sense to go on the spot for LNG, lot of cheap Azeri and Turkish gas in the region," the trader said.

Another player agreeing with sentiment said, "It is because of the pipeline import from TAP [Trans Adriatic Pipeline] and Italy."

With no gas production or gas storage facilities of their own, zero LNG imports in Greece was deemed unusual by market participants.

The high spot prices in the surrounding regions could also be making Greece a less attractive destination for the suppliers. The market has been consistently reporting regions like Italy to have much stronger bids than the rest of Europe. Moreover, there was new demand coming from Egypt in lieu of low domestic gas production. The recent Egas tender for a May cargo was awarded at a premium to TTF, sources said.

Platts, part of S&P Global Commodity Insights, assessed the DES East Mediterranean price for June at $9.039/MMBtu, a 12.5 cents/MMBtu premium to the Northwest European LNG market, and a 2.5 centa/MMBtu discount to the Dutch TTF gas hub.