SPY389.46-2.40 -0.61%
DIA313.18-2.37 -0.75%
IXIC11,388.50-29.66 -0.26%

Portugal plans to use Sines port for shipping LNG to Europe -sources

reuters.com · 04/29/2022 10:00
Portugal plans to use Sines port for shipping LNG to Europe -sources

By Sergio Goncalves

- Portugal plans to double the capacity at Sines port to handle liquefied natural gas tankers and transfer the LNG on smaller vessels to European countries dependent on piped gas from Russia, two sources told Reuters on Friday.

One source said the plan being drawn up by the government "foresees, in the short term, exporting more than 2 billion cubic meters (bcm) of LNG through Sines per year and soon after increasing exports to 5 bcm - equivalent to Portugal's natural gas consumption".

Following Russia's invasion of Ukraine, the European Union has been struggling to find alternatives to Russian gas supplies, which cover 40% of Europe's needs. Russia has demanded to be paid for gas in roubles in response to Western sanctions.

Total Russian supplies to Europe last year were around 155 bcm, a figure Brussels wants to slash by two-thirds this year. nL2N2VW0SK nL5N2VB4KU

Both sources familiar with the matter said that using simple equipment and modest investment, Sines could start receiving two LNG tankers a week, instead of one now, with the objective of setting up the transshipping operation.

The second source said that this way there would be no need to increase the country's storage capacity, which would be costly and take time.

"It is an easy and quick solution. The government expects to finalise the feasibility study very soon, the implementation schedule and exact quantities," said the first source, adding that Germany could be a potential destination.

A spokesperson at the Environment Ministry, responsible for energy matters, declined to comment.

Portugal has said that Sines - the closest deep-water European port to the U.S. coast - could be a gateway for LNG from countries such as the United States, Nigeria or Trinidad and Tobago. nL5N2VJ4SFnL5N2V73UV

Both sources said the use of smaller ships for transshipment would also help to avoid over-congesting the North Sea with large LNG vessels, making deliveries easier.

(Reporting by Sergio Goncalves, editing by Andrei Khalip and David Evans)

((sergio.goncalves@thomsonreuters.com; +351213509204; Reuters Messaging: sergio.goncalves.reuters.com@reuters.net))