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SINGAPORE (ICIS) –Spot LNG prices in Asia and gas prices in Europe remain high on tight supply. The ICIS TTF September ’22 contract price reached $61.02/MMBtu on 2 August, the second highest on record after 8 March.
Russia’s Gazprom said the delivery of a turbine engine that could help keep gas flowing to Europe was not possible. Russian gas flows to Germany through the Nord Stream pipeline remain low at 32 mcm/day. Norwegian gas flows are expected to increase by almost 10% to 31 mcm/day.
The East Asia Index (EAX) was steady as of 4 August after rising for a week.
U.S. Freeport estimated an early October restart as previously indicated. U.S. Henry Hub futures were pushed higher on Freeport’s update.
Asian Demand Developments
Northeast Asian demand mainly came from Japan and South Korea. Daigas Group, formerly Osaka Gas Group, and SK Prism were heard to be seeking October cargoes.
High spot prices sidelined most end-users in Asia. End-users in Japan and South Korea are now looking at winter cargoes instead.
LNG inventories at Japan’s major power utilities rose by 0.9% from the previous week to 2.28 m tonnes as of 31 July, higher than the five-year July LNG inventory average.
China remains balanced despite its many cargo resales in recent months, with weaker LNG demand and alternative fuel sources.
Chinese buyers are largely avoiding spot buying activity while NOCs were heard conducting time swap and other optimization activity.
New Tender Activity
India’s state-owned GAIL did not award any LNG cargoes in its latest swap tender that closed on 3 August. GAIL offered two July 2023 FOB cargoes in exchange for two September DES cargoes to Dahej.
India’s GSPC could have awarded limited volumes from its buy tender that closed last week.
Thailand’s PTT partially awarded its recent buy tender that closed on 1 August for five September cargoes. BP and Trafigura were heard as winners. As many as three to five cargoes were purchased, with prices within the $45-47/MMBtu range.
Indonesian producer Pertamina offered an FOB cargo loading from Bontang LNG on 17-18 August. The tender closed on 3 August.
Kuwaiti energy firm KUFPEC could have sold an FOB cargo loading from Wheatstone LNG on 18-23 September in the low $40/MMBtu to a portfolio player on 28 July.
Australian Supply Shortage
Australia extended the Australian Domestic Gas Security Mechanism (ADSGM) until 2030. ADSGM allows the government to restrict exports to ensure enough gas for domestic use.
The east coast of Australia is forecast to face a shortfall in 2023, according to an Australian Competition and Consumer Commission (ACCC) report.
TotalEnergies’ Cape Ann FSRU will be used in France’s Le Havre LNG terminal. The terminal is set to begin works this autumn and be operational from September 2023.
The 173,000 cbm Bahrain Spirit FSU is heading to Germany’s Wilhelmshaven port for 15 August, according to ICIS LNG Edge. It is carrying a cargo from U.S. Sabine Pass. It could be preparing to take up a position at a project importing cargoes into Germany to help replace declining Russian pipeline gas flows.
France’s Engie has booked the last 1 bcm/year of gas import capacity at the planned Dutch Eemshaven LNG import terminal with 8bcm/year capacity of pipeline gas imports, due to start operations in September.
Italy’s 6 mtpa Adriatic LNG terminal is shut for planned maintenance for most of the current month of August.
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