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MADRID (ICIS) –The spread between TTF and Asian prices narrowed slightly in the seven days to 26 May, as the ICIS TTF dropped slightly while the East Asia Index (EAX) rose on regional demand rallies.
Demand remains strong, with a flurry of tenders closing for buyers such as Tohoku and EGAT in the last week.
Shippers with summer length have also made re-lets available in Asia. A discount to the TTF for Delivered-Ex-Ship (DES) LNG sales to Europe is making some cargoes more flexible in terms of destination.
European gas storage levels continue to rise as countries face increasing issues accessing Russian gas, with Finland one of the latest importers to see supply shut down.
LNG inventories at Japan’s major power utilities fell by 2.45% from the previous week to 1.99m tonnes as of 22 May, according to a 25 May update by the country’s Ministry of Economy, Trade, and Industry. This puts the week’s inventory higher than the four-year May average of 1.98m tonnes, the same document showed.
There is the possibility of emerging demand from China if the government further lifts lockdowns. But demand remains weak for now.
Hoegh LNG is considering expanding its fleet of 10 floating storage regasification units (FSRUs), driven by new demand as Europe cuts dependence on Russian pipeline gas. Expansion will come through newbuilds or conversions.
Italy’s grid operator Snam has chartered the Golar Arctic to serve as an FSRU to import LNG into the island of Sardinia, according to a statement from operator Golar LNG.
The ship will need to be converted from an LNG carrier into an FSRU, which could take two years. The FSRU will be installed at Portovesme in Sardinia.
US Supply Deals
US company Venture Global took a final investment decision to develop the first 13.33mtpa phase of its second LNG project, Plaquemines LNG, and the associated Gator Express pipeline. Venture Global has signed sales and purchase agreements for 80% of the full two-phase 20mtpa project.
South Korea’s POSCO has signed a 0.4mtpa, 20-year LNG Sale and Purchase Agreement with US Cheniere, the companies said.
The agreement is on a free-on-board basis and will start from late 2026. The price is linked to the US Henry Hub plus a liquefaction fee. POSCO is the first operator of a private LNG terminal in South Korea. For Cheniere, the volume further supports plans to develop Stage 3 of its Corpus Christi LNG project which could come to FID this summer.
Germany’s RWE has signed a heads of agreement with US Sempra to discuss terms on a 2.25mtpa, 15-year LNG supply deal from the Port Arthur project. This is the first active agreement for the greenfield project.
Indian grid operator GAIL awarded 1 of 2 cargoes with a 8 June DES buy tender to the Dahej terminal bought in the low-$21.00s, trade sources said. A separate DES buy tender to the Hazira terminal for 1-3 June delivery was not awarded. The tenders closed on 24 May.
State-run refiner Indian Bharat Petroleum Corp (BPCL) did not award a 28 June DES buy cargo closed 24 May to the Dahej terminal, trade sources said.
RPGCL, part of Bangladesh’s Petrobangla, has issued a single cargo LNG buy tender for delivery to Moheshkhali on 22-23 June. The tender will close on 29 May and is valid to 2 June.
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