NWE LPG buyers seek alternatives after jetty damage at Le Havre

Disruption at the northern French port of Le Havre that brought LPG imports to a halt has forced players to look to alternative Northwest European markets to fulfill their needs, sources said March 26.

While prices in the LPG market generally weaken heading into the summer months as both heating and gasoline blending demand dwindle, the disruption could tighten logistics in the inland propane markets, they said.

"So, receivers are looking for supply alternatives by rail and trucks, putting some pressure on ARA storages and refineries, while there is not much available there," one source said.

A tanker delivering to petrochemical sites along the Grand Canal du Havre last week struck the wharf of the Norgal gas terminal, rupturing a gas pipe which was not full at the time of incident but nevertheless contained gas residues, local media have reported.

Subsequently, imports into Le Havre have been stopped for repairs to the jetty, with disruptions potentially continuing until October, according to market players.

Norgal is one of the major LPG sites in France, with an average of 2.5 million mt of butane and propane received each year sea and land.

Norgal has a total storage capacity of 90,000 cu m, including 40,000 cu m of propane and 50,000 cu m of butane, with Antargaz, Vitogaz and TotalEnergies all customers and shareholders of Norgal.

Propane demand from Le Havre is predominantly in the residential sector, while butane is utilized for cracking.

Antwerp works

More broadly in the LPG market, upcoming maintenance at Antwerp refinery was expected to prevent rail car exports, another market players said, forcing participants to source trucks instead.

"In Antwerp, next week there is maintenance in the storages so you cannot load rail cars, everyone will be loading trucks," an inland trader said.

As such, mounting logistical pressures could buck seasonal trends of weakening inland market premiums after the winter season, sources speculated, as players scramble to resource lost import volumes.

Platts, part of S&P Global Commodity Insights, assessed both the propane FOB ARA barge market and the FCA ARA rail cars or trucks at premiums of $117.25/mt to the CIF Northwest Europe large cargo market on March 25. In outright terms, that represented $650/mt, the lowest since November.

Imports into Le Havre averaged 98,500 mt over January and February, according to Kpler shipping data. Of the January and February quantities, butane accounted for 70,000 mt, propane 77,000 mt, while the remainder was unspecified LPG.

March volumes stood at 29,000 mt, predominantly butane at 21,000 mt, according to Kpler. Import volumes have slid week on week, with loadings in the week beginning March 18 of just 5,000 mt, while this week volumes have dropped to 1,000 mt.