LNG prices still down in limited European delivery windows
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LONDON (ICIS) – European and Asian prices have continued to move in parallel to some extent, driven by new supply deals, tighter European supply and new Russian sanctions.
Strong European demand has kept European gas prices higher than those in Asia. LNG prices in Europe remained mostly heavily discounted to the TTF gas price for June and July deliveries, with limited one-off availability at European terminals.
Demand in South and Southeast Asia has picked up, as evidenced by a series of tenders over the week. The United States has signed a new long-term supply agreement with Southeast Asia.
Demand from Northeast Asia could increase in the coming weeks on summer requirements, leading to increased competition for cargoes.
Thailand’s EGAT has launched a tender for a shipment to be delivered in June, closing on May 16.
PTT also launched a similar tender covering four delivery windows in June, closing on May 16.
Pakistan LNG likely awarded its latest May 11 tender to PetroChina, which submitted the lowest bids for two cargoes at the Port Qasim terminal in June at $23.96/MMBtu and $22.49/MMBtu.
While high temperatures kept Indian demand up, India’s utility Gail is unlikely to have awarded a June 21-23 delivery tender that closed on May 11.
In Northeast Asia, Japanese and Korean buyers are said to be looking for short-term shipments to meet summer demand.
Japanese Hokkaido Electric probably bought a shipment at $20.00-20.50/MMBtu via tender on May 10.
Turkey’s Botas has issued a tender for four cargoes for May-August delivery, with bids due May 12. This is Botas’ first tender since February.
The TTF benchmark remained volatile, with prices averaging around $25/MMBtu as the market continued to react to changing supply.
The Russian government on May 11 imposed sanctions on a new list of companies that included a consortium partly owned by Gazprom in the Yamal gas pipeline and various subsidiaries of Gazprom Germania in Europe and Singapore. However, the extent of the sanctions and their immediate impact on gas exports to Europe were unclear.
Earlier in the week, Ukrainian operator GTSOU declared force majeure on the Sokhranovka transit border point at 33 mcm/day between Russia and Ukraine, pushing up the TTF.
The Dutch operator Gasunie announced on May 10 that it had signed a five-year contract for the rental of an FSRU from New Fortress Energy. The Golar Igloo was reportedly set above $150,000/day. The FSRU is expected to arrive in Eemshaven in the Netherlands in August, making it the second FSRU expected at the terminal in August.
This follows the May 5 announcement by Germany’s Uniper that the company has facilitated the chartering of two Dynagas-run FSRUs for the German government. FSRUs could start as early as 2023.
Elsewhere, the Karmol LNGT Powership Asia is en route to Brazil where it is set to become the next import terminal for Ceiba’s LNG project in Protocem.
Long term supply
US Venture Global has signed two long-term sale and purchase agreements with ExxonMobil for 2mtpa of the Plaquemines and CP2 LNG plants.