DESFA LNG Auction Succeeds
DESFA liquefied natural gas (LNG) cargo slots auctions for 2024 have proven successful, according to a report from Energy Press.
Just five of a total of 45 slots were available as 40 slots had already been reserved by bidders during a previous round, the report added.
In 2023, DESFA is staging LNG slot reservation auctions that offer capacities for the upcoming 15 years, between 2024 and 2038, triple the five-year extent offered up until last year.
Slot commitment by bidders beyond five years constitutes a significant qualitative leap for both the natural gas market and gas infrastructure as, on the one hand, long-term capacity agreements are bolstered, and on the other, infrastructure development visibility is improved through the expression of definite interest, market officials noted.
Latest auction premia have fallen to much lower levels, compared to last year, a development attributed to two key factors, reduced gas demand and the forthcoming launch of the Alexandroupoli LNG facility in Greece’s northeast, DESFA sources noted.
Reduced gas demand and the imminent launch of the new Alexandroupoli LNG facility, along with other gas-sector infrastructure, has led to a better supply-demand balance in terms of capacity commitment at the Revythoussa terminal – Greece’s only LNG unit at present – and prevented conditions for high premiums, as was the case last year.
Heightened gas demand last year pushed slot prices well above auction starting prices. As a result, premia, or windfall earnings, generated at the Revythoussa slot auctions and the Greek gas grid’s other entry and exit points reached €65 million.
