Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC



Asia prices ease despite restocking demand as Europe's crisis weighs

(Reuters) - Asian spot LNG prices inched down this week despite some procurement activity to replenish stocks, with more downside seen from muted Chinese activity during COVID-19 lockdowns.

Thailand Ptt Pipeline

European LNG prices continued to trade at a record discount to Benchmark Dutch TTF gas, as Russian pipeline gas supply issues dominated sentiment. The discount has a knock-on effect on Asian prices.

The average LNG price for June delivery into north-east Asia was estimated at $23.35 per metric MM Btu, around $0.55, or 2.3% lower than the previous week, industry sources said.

July delivery was estimated at $23.05 per MM Btu, they added.

European gas prices surged, with buyers unsettled by mounting threats to Europe's supply given regional dependence on Russia.

Pressure to secure alternative supplies rose after Moscow imposed sanctions on European subsidiaries of state-owned Gazprom and Ukraine stopped a major gas transit route.

Any disruption will see Europe scramble to secure additional LNG volumes, with tough conditions to secure long term supplies.

"Shifting flows for Ukraine transit and Russia’s sanctions have created new uncertainties for gas markets. (However) Europe continues to build inventories rapidly due to strong LNG supplies, with storage levels almost back to the 5-year average," said Edmund Siau, LNG analyst at consultancy FGE.

European LNG prices were assessed at $22.153 per MM Btu for June deliveries to Northwest Europe, equivalent to a $10 per mmBtu discount to the June TTF contract, said Ciaran Roe, global director of LNG at S&P Global Commodity insights.

"It was notable that the market's strong contango structure through June mirrored the stronger nearby prices for capacity slots at terminals," Roe said

He added that late-June slots in Northwest Europe were heard traded at $16 MM lump sum, or around $4.50 per MM Btu for a full cargo, while early-June slots were heard traded at around 25 MM euros ($25.9 MM), or $7.5 per MM Btu equivalent for a full cargo.

In Asia, utilities and traders from Japan, Korea and India were in the spot market for summer procurement but lockdowns in China continued to suppress overall Asian demand, Siau said.

Consultancy, Trident LNG, said in a report that some Asian buyers were taking Russian supply and grabbing a number of cargoes at below market pricing.

"Japan, Korea and India are in the market, so I doubt we will see a big decline in prices. I expect a softening into the low $20s to $20 range," said Toby Copson, global head of trading and advisory at Trident LNG.

He said some smaller Chinese players could be forced back to take cargoes as they make a choice between paying high spot levels in a low demand domestic market or face hefty penalties at terminals for not using booked slots, harming future chances to secure them.

(Reporting by Marwa Rashad; Editing by Veronica Brown and Kirsten Donovan)


Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo

FEATURED COLUMNS

Editorial Comment
-Lee Nichols
The gas processing/LNG sector is investing in new technologies to mitigate carbon emissions from both operations and its supply chain.
Industry Focus: Maximizing the performance of your ETRM system
-Teresa Kroh, Brad York
Energy trading and risk management (ETRM) systems are vital for the support of business processes associated with trading energy commodities such as crude oil, refined products, natural gas, natural gas liquids (NGLs) and electric power, as well as facilitating the movement and delivery of those energy commodities and associated risk management activities.
Sustainability
-Oz Rodriguez, Catriona Penman
More than 100 participating countries at the 26th UN Climate Change Conference of the Parties (COP26) signed the Global Methane Pledge, in which they agreed to take action to reduce methane emissions at least 30% by 2030 vs. 2020 levels.


Optimizing Gas Distribution: Accounting for Changeovers, Regulators, and More

Register Now

Gas distribution systems are critical to the effective operation of many industrial facilities around the world. Despite the importance of these systems, however, opportunities to improve their performance and cost-effectiveness are often missed or misunderstood. Increasing changeover pressure may seem like a good way to improve system flow, for example, but it often does so at the expense of bottled gas. Adding regulators may help you control supply pressure, but it also adds cost to your system. So, how do you know what the ideal gas distribution setup is for you?

Attend this webinar to:

  • Gain a basic understanding of the fluid dynamics that affect pressure control in gas distribution systems, learning to interpret flow curves and recognize phenomena like lockup, droop, and supply pressure effect (SPE)
  • Learn how inlet pressure affects regulator performance and when to specify certain regulator types and configurations to effectively control gas system pressures

Understand the inherent trade-offs between gas utilization and flow capacity and how to select both the right changeover pressure and automatic changeover panel design for your operations.

May 4, 2021 10:00 AM CDT

Register Now

 

Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2022 Gulf Publishing Holdings LLC.