SINGAPORE: Prices of Asian spot liquefied natural gas (LNG) eased for a seventh consecutive week, falling to a near one-and-a-half year low, amid ample inventories in North Asia and Europe.
The average LNG price for March delivery into Northeast Asia was at $18.50 per million British thermal units (mmBtu), industry sources estimated, its lowest levels since August 2021.
This is $1, or 5.1%, lower than the previous week, and down 34% since the start of the year.
“Both Europe and North Asia are expected to exit winter with comfortable gas storage cushions and are not under pressure for prompt procurement,” said Lee Ken Kiat, senior analyst for gas and LNG at consultancy FGE.
“(The) impending Freeport restart has contributed to improved sentiment and softer prices, but it is still unclear how quickly the plant will ramp back up to capacity,” he added, referring to the plant of Freeport LNG which shut due to a fire in June.
The second largest LNG exporter in the U.S. had sought approval from federal regulators to start loading LNG onto ships at its long-idled export plant in Texas, according to a filing made available on Thursday. But analysts do not expect Freeport to reach full capacity until mid-March or later.
Global LNG: Asian spot prices extend downtrend, tracking lower prices in Europe
Amid easing spot prices, some energy companies in Asian emerging markets such as Thailand’s PTT as well as GAIL Ltd and Petronet from India began seeking cargoes for delivery during February to April.
Bangladesh also aims to buy more spot cargoes in the next few months, said officials at the country’s national gas company, reversing a government decision to halt spot purchases after prices spiked last year.
“Lower delivered prices have brought back several firms that had been largely priced out through much of 2022, with a couple awarding tenders over the course of the week,” said Samuel Good, head of LNG pricing at commodity pricing agency Argus, referring to tenders issued by South Korean utility KOMIPO and Bangladesh’s state-owned RPGCL.
In Europe, S&P Global Commodity Insights assessed its daily north-west Europe LNG Marker (NWM) price benchmark for cargoes delivered in March on ex-ship (DES) basis at $16.759/mmBtu on Feb. 2, a discount of $1.10/mmBtu to the March gas price at the Dutch gas TTF hub, said Ciaran Roe, global director of LNG.
Through to late March, forecasts for minimum temperatures are broadly above seasonal norms, with the exception of a brief cold spell next week, added Argus’ Good.
“Together with continued sizeable underground gas storage inventories, this has continued to hold European gas hub prices lower than the levels we’d seen through most of last year,” he said.
Meanwhile on LNG spot freight, Atlantic rates were little changed on the week at $55,750/day on Friday, said Henry Bennett, global head of pricing at Spark Commodities. Pacific rates, however, slid to $68,750/day.
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