In a rare profit-seeking move, energy traders are storing natural gas at sea in hopes that prices will surge this winter as Russia's energy squeezes on Europe.
Europe's power utilities have taken to storing gas on offshore vessels because of the high demand, according to the report.
According to the report, the amount of gas in floating storage reached its highest level in two years at the beginning of September. The coast of Europe, Asia, and Central America is home to at least 9 vessels that store gas.
There is a potential opportunity to cash in on spikes in European gas prices this winter, which is why traders are holding onto Liquefied Natural Gas.
Since the start of the year, European gas prices have risen to record highs as Russia has stopped sending gas to the region. Russian leaders have been accused of weaponizing energy in response to Western sanctions.
The Dutch TTF natural gas futures shot up 36% in a single session Monday on the news that Russia had stopped supplying gas to Europe. Hopes for a European plan to cap Russian gas prices caused prices to fall 8% at last check Thursday.
With gas supplies in Europe expected to get tighter in the winter, there is the possibility of another run higher for prices.
European utilities are keeping gas in floating storage as facilities on land fill up. The strategy reflects the extent of the European energy crisis, which has countries scrambling to stockpile on as much fuel as possible to make up for the absence of Russian gas in the winter.
It's an unusual move because of the tendency ofLNG to evaporate over time. Other rare moves to take advantage of Europe's thirst for winter fuel are being made because of Russia's gas cuts.
Europe is building floating terminals. The offshore floating terminals are seen as the solution in the crunch because onshore regasification takes longer to install.
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