Yamal LNG's cargo to China signals start of regular supply

LONDON: Russia's Yamal liquefied natural gas (LNG) project has sent its first cargo to China this year, signalling the start of regular flows from the producer to Asia.

The cargo is onboard the Clean Planet vessel, on route to the PetroChina-controlled Caofeidian gas terminal in Tangshan, according to Refinitiv Eikon shipping data. It is due to arrive on May 20.

A low price spread between European and Asian LNG prices this year had confined Yamal's cargoes to Europe, Refinitiv data shows.

Yamal has agreed to supply 3 million tonnes of LNG to PetroChina over 20 years. The deal was expected to take effect this month, an industry source familiar with the matter said.

The agreement is on a delivered-ex ship basis, with China set as the destination, meaning the cargoes have to be delivered by Yamal to China on Yamal LNG ships.

Two shipping sources said Clean Planet had been charted by Yamal LNG.

The industry source said they believed this cargo was the first under the long-term contract.

Yamal could not immediately be reached for comment.

In addition to the long-term contract, PetroChina has a 20 percent equity stake in Yamal LNG, allowing it to offtake spot, cargoes from the project.

PetroChina's London subsidiary has been selling spot cargoes under this equity stake to Europe over the past year.

Around 1 million tonnes are expected to be imported under the long-term deal this year, ramping up to 3 million tonnes later, the industry source said.

A total of 14 cargoes were shipped from Yamal to China last year on a spot basis, rather than under the long-term deal.