* LNG supplies to Europe to fall 24 pct this year - SocGen
* Producers prefer higher-paying customers in Asia, LatAm
* Many cargoes to Europe are re-exported
* Transshipment seen as growing business
* Some operators eye LNG as shipping fuel
By Oleg Vukmanovic and Muriel Boselli
LONDON/PARIS, Sept 20 (Reuters) - Many European importterminals for shipped gas may have to be idled because offalling deliveries unless they try their hands at alternativebusinesses such as ship-fuelling stations.
Terminal operators across Europe have seen deliveries ofliquefied natural gas (LNG) drop over the past year as Asian andSouth American buyers are willing to pay more to meet surgingdemand.
"European LNG deliveries will drop by 24 percent in 2013,which comes in addition to a 30 percent fall in 2012," saidThierry Bros, senior gas and LNG analyst at Societe Generale.
Adding to the trouble is that many import terminals,especially in continental Europe, are under take-or-paycontracts that force them to accept LNG deliveries even whendemand is not there or pay stiff fines.
As a result of such contractual obligations and slackdemand, more than a tenth of Europe's LNG is currently loadedback onto tankers for onward transport to higher-paying marketsin Latin America or Asia, tripling to 3.8 billion cubic metres(bcm) between 2011 and 2012.
"Everything that brings more flexibility to the LNG shippingchain is vital," said Jean-Marc Guyau, who heads France's LNGterminal operator Elengy.
One option to deal with lower demand is simply to idlecapacity, but this comes at a high price.
Spanish imports nearly halved in the January-June periodcompared with two years ago, to just 5.6 million tonnes.
The resulting strain from low utilisation led Spanish gridoperator Enagas to mothball its 7 bcm/year El Musel importterminal directly after the facility's completion last year.
In Spain, which has Europe's biggest LNG import capacity,the financial burden of running idle terminals falls on thestate, while traders can take advantage of high Asian and LatinAmerican prices by re-exporting cargoes at record rates.
European LNG import prices are around $10 per millionBritish thermal units (mmBtu), while Asian and Latin Americancustomers pay more than $15 per mmBtu.
There are also problems in France, with utilisation at theMontoir LNG terminal standing at just 12 percent - leading tohigh maintenance costs for relatively few LNG cargos.
One alternative that some operators are eying but that isstill in its infancy is ship-to-ship transfers of LNG, whichwould speed up re-exports and has been tested at Montoir.
The French port of Dunkirk and Belgium's Zeebrugge have beenshortlisted by Russia's Arctic Yamal LNG project to find afacility where its LNG can be transferred from ice-class tankersto conventional LNG vessels.
To address the problems, some operators are also seekinghelp from Qatar, the world's biggest LNG exporter, which is intalks with several European terminal operators to buy importcapacity as an insurance policy in case demand in Asia drops.
These so-called put-option deals would give Qatar the right,but not the obligation, to deliver LNG to Europe, acting as ahedge if Asian demand falls as a result of lower Asian gas usageor rising competition from new suppliers such as Australia.
Talks are being held with importers at the Dutch Gateterminal, where deliveries have hit rock-bottom.
Qatargas has also signed a five-year agreement to supplyover a million tonnes of LNG a year to Petronas in Britain,and traders say this may be the first put-option deal agreed.
Another alternative for terminals is LNG as ship fuel.
The Gate terminal is spearheading efforts to become Europe'stop ship-fuelling port in response to fading deliveries andmaritime rules that will take effect from 2015 aimed at boostingthe attractiveness of shifting from oil to cleaner natural gasas a shipping fuel.
Gate received its first LNG shipment from Skangass'small-scale LNG plant in Norway's Risavika in July, followed bytwo more since. The cargos will be reloaded onto vessels andhead to Sweden's Nynashamn terminal, where they will be brokeninto smaller parcels to power ferries, trucks and industrialcustomers.
"The shipping industry understands it will have to learn howto use LNG," said Thierry Chanteraud, of Total Marine Energy.
The Netherlands expects the business of LNG for transport togenerate 2.7 billion euros ($3.7 billion) for the country by2030. ($1 = 0.7384 euros) (Additional reporting by Michel Rose; Editing by HenningGloystein and Dale Hudson)
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