Latest News

Asian spot LNG prices are near a three-month low amid abundant supply

The Asian spot price of liquefied gas (LNG), despite a slight rise, remained near a three-month high amid abundant supply and mild weather predictions.

Average LNG price for delivery to North-east Asia in May Industry sources estimate that the price per million British Thermal Units (mmBtu) is now $14.60, up from $13.40/mmBtu a week ago.

Toby Copson is the chairman of Davenport Energy Partners. He said, "It’s a market that is currently reacting: it’s hard to predict what will happen next in a world where new tariffs and sanctions are being implemented, as well as if unforeseen new volumes of supply become operational."

He added that "conversely, as we approach summer months of procurement, this may drive spot demand higher and boost current prices."

Laura Page, Kpler's manager of LNG and gas insight, stated that Asian demand is high for LNG contracts, including those from Qatar. Oil-linked contracts are trending lower than spot prices.

She added that "in particular, Qatari LNG deliveries to Taiwan were above the five-year median in Q1 and deliveries to China have picked up in March. This is likely to displace U.S. Liquefied Natural Gas, which has been subjected to a 15% duty since February 10."

Martin Senior, Argus' head of LNG pricing, said that a heatwave forecast in India could lead to some LNG demand. However, LNG is currently too expensive for most Indian importers.

The Asian price is expected to stay stable next week due to the steady European gas movement, mild weather forecasts and ample supply projections. Also, rising expectations for restocking are also contributing factors, according Ronald Pinto of data analytics firm Kpler.

Pinto said that in Europe, temperatures above average and a partial wind recovery are expected to hold prices steady next week, but they could increase later in March if temperatures fall below the seasonal averages.

The European storage inventories are currently around 34% full, as the market prepares to move from withdrawal mode to injection in the next few months.

Alex Froley is a senior LNG analyst with ICIS. He said that "Storage was not close to running out, but filling it would require Europe to compete strongly against Asia in order to obtain LNG throughout the summer."

He added, "But as LNG Canada ramps up and the next six train at Corpus Christi Stage III ramps up over the course the summer, this should add quite an amount of LNG to the market."

S&P Global Commodity Insights estimated its daily North West Europe Gas Marker (NWM), a price benchmark, for cargoes to be delivered in May ex-ship on March 20 at $12.912/mmBtu. This represents a $0.70/mmBtu reduction from the gas price in May at the Dutch TTF Hub.

Spark Commodities set the price of April at $12.988/mmBtu. Argus had the March price set at $13.15/mmBtu.

Qasim Afghanistan, Spark Commodities analyst, stated that the arbitrage rate between the U.S. and north-east Asia through Cape of Good Hope has remained stable, encouraging U.S. cargoes for delivery to Europe.

The LNG market saw a rise in rates this week, with the Atlantic region reaching $31,000/day by Friday. This is the highest rate this year, according to Afghan. Meanwhile, Pacific rates increased to $27250/day.

(source: Reuters)