LONDON (ICIS) – LNG pricing highlights this week were largely characterized by big rises in the US Henry Hub price, driven by tight supply and a lack of new production indicators ahead of summer demand.

Asian spot LNG prices rose on expected summer demand, with high-than-usual temperatures in Japan a factor in particular. Asian prices are still at a wide discount to Europe, with the benchmark TTF lifted by a European Commission proposal to ban Russian oil products, coupled with limited wind generation keeping gas demand elevated.

Long-term supply deals particularly stood out, underscoring the changes taking place in the market as Europe continues its shift away from Russian piped gas and the US moves quickly to offer its LNG as an alternative.

Long-Term Supply Deals

US Energy Transfer and trading house Gunvor announced a 2mtpa deal from the proposed 16.45mtpa Lake Charles LNG project, as well as SK Gas with another 0.8mtpa. 

US LNG developer NextDecade and France-based ENGIE announced a 15-year agreement for 1.75mtpa of LNG from the Rio Grande LNG project near Brownsville, Texas. 

US LNG producer Cheniere announced a new long-term agreement with Canadian producer ARC Resources for a 15-year supply to feed into Train 7 of Cheniere’s Stage 3 Corpus Christi expansion. 

Import Infrastructure

Estonian and Finnish gas system operators Elering and Gasgrid Finland signed a cooperation agreement on 4 May for the joint lease and management of a floating storage regasification unit (FSRU) in the Baltic Sea port of Paldiski. Each country will pay for its own infrastructure costs, with the FSRU expected to be moved to southern Finland once import facilities are built there. The countries aim to secure the FSRU for the project by the end of the year, motivated by both countries’ desire to cut dependence on Russian pipe gas.

Market participants will be able to submit binding requests for booking terminal capacity at Germany’s planned LNG terminal in Stade as early as this summer. This follows an extremely positive response to the expression-of-interest process in April.

Export Infrastructure

BP was wary on prospects for new LNG production from Indonesia’s Tangguh Train 3 and the Tortue LNG project offshore Senegal.

The company said it hoped both projects would start up by the end of 2023. It blamed work disruption caused by Covid-19.

Equinor’s 140,000cbm Arctic Voyager is heading to Norway’s Hammerfest LNG plant, where it will load the first cargo since the plant was shut in September 2020. The plant will re-open in mid-May.

Cargoes Bought

Argentina’s IEASA awarded five cargoes for its Escobar terminal and four cargoes to Bahia Blanca, all for June delivery. Vitol, Trafigura and Spanish seller Naturgy were named as winners. The tender closed on 27 April.

Thailand incumbent PTT bought a cargo for late May delivery to the Map Ta Phut terminal for around $23.00-24.00/MMBtu.

Indian end-users were active, with an earlier tender by grid utility GAIL that closed on 29 April awarded in the mid-$21.00s/MMBtu for late-May to early-June delivery to Dahej. Utility Torrent Power bought one cargo for mid-May to Dahej, with a wide range quoted in the market from the low-$20.00s/MMBtu to $21.00-22.00/MMBtu.