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SINGAPORE (ICIS) — European gas prices remained high this week, supported by supply tightness due to low Norwegian flows caused by unplanned outages at the Sleipner field and Nyhamna plant, and maintenance work on Nord Stream 1 set to last until 21 July.

The Hungarian government announced on 13 July that it will take emergency measures amid low gas supplies. Actions include a partial ban on gas exports and purchasing additional gas volumes at a state level.

Spot LNG prices in Asia stayed at historically high levels, bolstered by European supply disruptions, coupled with US Freeport short-covering activity and Asian summer demand.

US Henry Hub futures were pushed higher on 13 July due to a drop in daily gas output and strong cooling demand stemming from an ongoing heatwave.

Seasonal Demand in Asia

Short-covering demand from US Freeport offtakers remains center-stage, with eyes on August-September enquiries. Potential buyers include a large Japanese utility, a central Japanese gas firm and a South Korean independent firm, according to sources.

A Japanese utility company is also heard to be seeking cargoes bilaterally for October deliveries onwards, after having possibly bought four cargoes for November-January delivery in recent weeks.

Muted Chinese Buyers

Extreme weather alerts were issued daily this week, as the most intense heatwave of the year so far swept across China, bringing temperatures above 40C in southwest and northeast regions.

Market participants argue that the ongoing heatwave is unlikely to drive spot demand given the large discrepancy between high LNG spot prices and regulated domestic power prices.

Tender Activities

Despite high spot levels, several Asian buyers have issued and awarded tenders amid rising summer demand. New spot cargoes are also offered for northeast Asian destinations.

Middle Eastern producer Oman LNG is offering an August cargo with delivery to northeast Asia for 25-27 August, according to trade sources.

Indian grid utility GAIL likely bought a DES basis cargo at around $38.00/MMBtu on 12 July, trade sources said. The cargo is expected to be delivered on 1 August.

Thailand’s energy firm PTT was heard to have purchased two cargoes on a DES basis at around $40.00/MMBtu via a tender closed on 12 July, with expected deliveries in H2 August.

Kansai Electric might have purchased an early September cargo last week at a premium to a northeast Asian marker. This was not directly confirmed.

Separately, Argentina’s IEASA did not award any LNG cargoes in its latest August buy tenders that closed on 12 July.

German utility Uniper is seeking a cargo for delivery to the Netherland’s Gate terminal on 3 September via a tender that closes on 14 July, sources said.

LNG Infrastructure Updates

Angola’s 5.2mtpa Soyo LNG plant appears to be back in operation for the first time after over a month of maintenance.

Production at Shell-operated Prelude LNG offshore Australia has been temporarily suspended until 22 July due to industrial action by labor unions that prohibit offtake activities.

France’s TotalEnergies has signed an agreement to supply an FSRU to Deutsche Regas to be positioned at Lubmin in Germany, the German independent LNG company announced on 13 July.

US Venture Global received approval from the Federal Energy Regulatory Commission (FERC) on 8 July to commission the ninth and last liquefaction block at the 10mtpa Calcasieu Pass LNG project in Louisiana.

Charter Rates

Charter rates on the prompt market remain low this week, mainly due to oversupplied tonnage.

The Atlantic basin TFDE market is currently reported at about $40,000/day, while the Pacific basin market is at a premium of around $10,000/day.

Brokers expect the prompt market to significantly tighten in the upcoming autumn procurement season.