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Sinopec racks up ship costs on Australia Pacific LNG 1st cargo delay

Published 05/01/2016, 06:53 pm
Updated 05/01/2016, 07:00 pm
© Reuters.  Sinopec racks up ship costs on Australia Pacific LNG 1st cargo delay
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* Sinopec's LNG tanker floats off Gladstone for more than 2 weeks

* Demurrage costs climb to more than $500,000 - source

* Origin says first export to occur shortly

By Florence Tan

SINGAPORE, Jan 5 (Reuters) - The Australia Pacific LNG (APLNG) project has delayed its first commercial cargo, racking up costs for China's Sinopec Corp which has had a tanker waiting to load for more than two weeks, two sources close to the matter said on Tuesday.

LNG tanker BW Pavilion Vanda, chartered by the Chinese company, arrived at the Gladstone anchorage on Dec. 18, but has yet to load a cargo, live ship-tracking data on Reuters Eikon showed.

"The plant appears to have run into teething issues," one of the sources said, adding that there was no indication of when Sinopec's cargo would load.

Sinopec may have chalked up demurrage costs of more than $500,000 in the 18 days that the ship has been anchored off Gladstone, a second source said.

Another LNG tanker, Methane Spirit, arrived in the Gladstone anchorage on Dec. 2 and is now berthed at AP LNG's terminal in Curtis, Queensland, shipping data showed.

Origin ORG.AX and ConocoPhillips (N:COP) COP.N have a stake of 37.5 percent each in the A$25-billion ($18-billion) LNG project, while Sinopec holds 25 percent.

On Dec. 11, Origin said it had commenced LNG production and was on track to export its first cargo by the end of 2015, but has since revised that timeline.

"Australia Pacific LNG's plant on Curtis Island continues to ramp up production, and first export is expected to occur shortly," a company spokeswoman said in an e-mail reply to a Reuters query on Tuesday.

Origin declined to comment on who would pay the demurrage costs.

A senior LNG trader said: "It's not unusual if there is some schedule changes in the first cargo from a new plant."

Plans for Sinopec's new terminal in China's southwestern coastal city of Beihai to receive gas from AP LNG have been pushed to around March this year from the end of 2015 previously, according to a local government source with direct knowledge of the 3-million-tonne-per-year terminal.

Faced with an LNG supply glut, Sinopec has been in talks with global firms to sell part of the 7.6 million tonnes it has contracted to take from APLNG each year from 2016 to 2036. ($1=1.3885 Australian dollars)

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