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    Belgium Sees Higher H1 LNG Activity

Summary

But lower interest rates will hit Fluxys' regulated infrastructure business.

by: William Powell

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Natural Gas & LNG News, Europe, Liquified Natural Gas (LNG), Gas to Power, Corporate, Import/Export, Investments, Infrastructure, Storage, Pipelines, News By Country, Belgium

Belgium Sees Higher H1 LNG Activity

Belgian infrastructure operator Fluxys reported September 25 regulated first-half turnover of €260.0mn, up from €250.1mn in the same period last year. Its profit was €31.4mn, compared with €24.3mn in H1 2018. It saw record high levels at the Zeebrugge LNG terminal, including transhipments, and a new long-term contract with Qatar Petroleum for unloading LNG carriers, guaranteeing full payment, but at lower rates, until 2044.

More revenues came from LNG terminalling, but this was offset by a drop in the reference interest rate, which determines earnings from regulated activities, from 0.75% to just 0.23%. It invested €45.2mn, mainly in the fifth storage tank at the Zeebrugge LNG terminal, for which Russian independent producer Novatek has reserved the capacity. Not connected to the grid, it will be used principally for offloading and collecting LNG from Russia's northern plants. But €5.6mn was spent on transmission.

The number of ships docking at the Zeebrugge LNG terminal was more than double the number that did so in the first half of 2018: 36 ships came to the terminal to unload their LNG and 10 for transshipment services, while 12 small vessels docked to be loaded with LNG. May was an all-time record month with no fewer than 13 ships docking at the terminal and 194 trucks loading LNG.

In the first half of the year, the volume of natural gas sent out into the transmission system from the terminal was more than three times the level in the first six months of last year. And the commissioning of a second LNG-truck loading station also had a positive impact, with 1,081 trucks being loaded, compared with 650 in the first half of 2018.  

Another, long-term highlight was the sale of all capacity at the plant until 2044 to Qatar Petroleum, once the existing long-term contracts with other capacity holders expire over the coming years.

Transmission volumes for the Belgian market were up almost 4% on the first half of 2018, from 98 to 101.5 TWh. There was a 17% increase in transmission volumes for natural gas-fired power plants, taking these volumes to 23.5 TWh.

Offtake by directly connected industrial companies rose by almost 7% to 25.3 TWh and transmission to distribution system operators stood at 52.8 TWh, down 2.6% on the first six months of 2018, reflecting the milder temperatures this year. Border-to-border natural gas transmission volumes fell 10% vis-à-vis the same period last year to 127.5 TWh, mainly because of a sharp decrease in exports to the UK.

The new transmission tariffs for an average Belgian consumer in 2020-2023 will be around 5% lower than the indexed tariffs for 2019. The tariff decrease does not affect Fluxys Belgium's net profit and is a result of the company's sustained efficiency drive, lower interest rates and the restitution of past regulatory balances, it said.

Fluxys Belgium is working with parent company Fluxys and other market parties to stimulate the use of natural gas as an alternative fuel for transport and in the first half of the year the number of vehicles running on compressed natural gas (CNG) in Belgium rose from 14,000 to 17,000, while more than 15 new CNG filling stations opened, taking the total to over 120.

Fluxys is teaming up with partner Titan LNG to build an LNG bunkering pontoon in the Port of Antwerp and the surrounding area. Fluxys Belgium is also looking at injecting biomethane and hydrogen into its infrastructure.