Editor’s Note: This content is provided courtesy of Independent Commodity Intelligence Services (ICIS). Visit natgasintel.com/icis for more information.

LONDON (ICIS) — Russia stepped up its curtailment of gas flows to Europe this week, in a move designed to be the dominating factor in the market. The impact was palpable as the ICIS TTF front-month gas price, the global benchmark, rose by 30% over the last seven days, with little indication of a significant fall back as long as current market conditions persist.

The TTF maintained its premium over the East Asia Index (EAX), though expectations of temperature-related Japanese LNG demand could add support to Asian prices.

LNG cargoes were sought via a new tender issued by Thailand. High prices may have deterred some Indian buying, while new sell tenders emerged from the Middle East and West Africa.

Further long-term deals to purchase US LNG were signed, a trend that is expected to grow.

Russia Tightens the Screw

Gas flows via the Nord Stream 1 (NS1) pipeline from Russia to Germany almost halved midweek, to a rate of just 38 mcm/day. They then decreased further to just 20% of the pipe’s capacity. Russia’s Gazprom said the reduction was because another turbine needed to be taken out of service, although this reasoning was rejected by the German authorities.

Global Gas Prices Soar

The ICIS TTF September ‘22 price rose 30% over the last seven days, settling at around $61.11/MMBtu on 27 July.

The US Henry Hub futures front-month price also firmed, settling at around $9.00/MMBtu on 27 July, supported by strong weather-driven demand.

LNG Supply Disruption

Labor action at the Prelude floating LNG unit operated by UK major Shell in Australia will continue until 11 August, taking the standoff’s duration to two months. Shipments from Prelude have been fully suspended since 11 July after the standoff was initiated in the first half of June.

Train 4 at US Sabine Pass LNG was offline as of 28 July. Train 3 came back online on 27 July, having gone offline two days earlier.

New Tenders Issued

Thailand incumbent PTT issued a buy tender covering five delivery windows: 7-8, 11-12, 17-18, 21-22 and 25-26 September. The tender closes on 1 August.

State-owned Middle East producer Kuwait Foreign Petroleum Exploration Co (KUFPEC) issued an FOB sell tender for 18-23 September loading from Australia’s Wheatstone LNG. The tender closes on 28 July.

West African producer Angola LNG offered an August-early September DES cargo as far east as Singapore, with other delivery options to Brazil, Europe, Kuwait, India and Pakistan from 14 August to 7 September. The tender closed on 27 July and was valid to 28 July.

Tenders Concluded

UK major Shell awarded three DES sell cargoes for delivery in February, March and April 2023 at premiums to a northeast Asian marker of $0.40/MMBtu, $0.30/MMBtu and $0.15/MMBtu respectively.

An FOB sell tender for two cargoes by Egyptian producer EGAS from Damietta was awarded to an energy trading firm, likely Glencore or Trafigura, at a discount of around $12.00/MMBtu to the TTF, trade sources said. The tender closed on 26 July.

State-run refiner Indian Oil Corp (IOC) did not award a 23-24 August DES buy tender to the Dahej terminal, trade sources said.

Japanese energy producer INPEX was heard to have bought a DES cargo for 26-30 September loading at around $47.00/MMBtu in a fixed price transaction. The tender closed on 26 July.

Singapore-based Pavilion Energy awarded a 28 August-15 September DES cargo into Singapore at around $36.00-37.00/MMBtu. The tender closed on 21 July.