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MILAN, March 11 (Reuters) - Europe is likely to attractfewer liquefied natural gas (LNG) shipments than previouslyexpected this summer as Egypt gears up to become the region'stop-paying importer, traders said, potentially increasing gasprices in northwest Europe.
While analysts still expect more LNG to land in Europe thisyear than in 2014, forecasts will be tempered by increasedcompetition with Egypt, signalling tighter supplies at a timewhen Dutch authorities move to limit production from Europe'sbiggest gas field.
That may force gas prices higher in northwest Europe asutilities look to refill depleted inventories, analysts said.
A year-long demand slump in Asia, the world's biggest LNGmarket, has triggered a rush of sea-borne deliveries totypically overlooked European ports over the past two months,raising expectations that more will come during the summer.
"The start-up of new production plants in Australia andPapua New Guinea, with three more due to start in Australia thisyear, should mean that more flexible production from Qatar getsdiverted into Europe," an analyst at a European utility said.
Qatar is the world's biggest LNG exporter and a majorsupplier to Europe's most highly traded gas markets in Britain,Belgium and less frequently the Netherlands.
But with Egypt beginning LNG imports from April with roughly31 cargoes due this summer at price premiums to Europe, sometraders are working to re-route supplies.
Trafigura, Vitol and Noble Group have arranged to supplyabout 49 cargoes to Egypt over the next two years, with afurther six agreed with Algeria for this summer.
That equates to about 1.5 billion cubic metres of summergas, according to one analyst's calculations, which exclude a21-cargo deal being finalised by BP.
Trafigura's two-year, 33-cargo commitment to Egypt will bemet largely by Qatari production, traders said, which may leadto lower than expected Qatari deliveries to Europe, Dubai andIndia in the summer months.
Qatar is also due to supply Pakistan and Poland under newsupply deals starting this summer, further tighteningavailability to key terminals in northwest Europe.
The remaining Egyptian supply will need to be sourced fromnearby Atlantic production plants, picking off cargoes otherwiseearmarked for Europe. Any strong Asian spot LNG price recoverycould bleed away more Atlantic supply into eastern markets.
"If Egypt starts imports this summer, which is probable,European LNG deliveries will be reduced as Egypt will be apremium market in that region," a trading house source said.
One Asia-Pacific trader said that companies are competing tobuy spare Nigerian cargoes to supply Egypt.
Another trader at a Spanish energy company, which holdsseveral LNG import deals, was approached to resell LNG totraders or re-export imported cargoes from Spain's domesticterminals.
Gazprom is also working to conclude a separate multi-cargosupply deal with Egypt.
(Reporting by Oleg Vukmanovic; Editing by David Goodman)
