Global LNG: Asian spot LNG remains near highest level this year

LONDON: Asian spot liquefied natural gas (LNG) prices edged down this week as high inventories depressed demand, but prices remained near their highest level this year, tracking European gas prices which have risen on supply concerns.

The average LNG price for January delivery into north-east Asia was at $15.00 per million British thermal units (mmBtu), slightly lower than $15.10/mmBtu last week, industry sources estimated.

“Colder temperatures in north-east Asia will keep prices in check although not expected to lift spot demand as ample inventory levels and high LNG prices will sideline major buyers,” said Go Katayama, LNG and natural gas analyst at Kpler.

“We think Asian prices will hold steady, with some risks on downside due to recovering supply from the Pluto and Freeport (facilities), higher pipeline gas from Russia to China and higher nuclear availability in Japan,” Katayama said.

Pakistan’s deferment of some Qatari LNG cargoes from 2025 to 2026 marks the second occasion in a month in which a country bought more LNG beforehand but in the end will consume less, after Egypt’s slowdown of cargoes due to logistic complexities, said Klaas Dozeman, market analyst at Brainchild Commodity Intelligence.

“This creates a slight loosening of the balance for 2025,” Dozeman added.

In Europe, gas prices were firm amid colder weather this week and faster gas storage withdrawal.

Global LNG: Asian spot LNG gains as colder weather drives demand

“Europe’s gas storage facilities are below the levels of the previous two years, although they are still significantly higher than they were at the same time in 2021 ahead of the energy crisis of 2022,” said Alex Froley, senior LNG analyst at data intelligence firm ICIS.

“If the rest of winter is mild, prices could fall back, but if it remains colder, storage will enter next summer lower than last year, which has contributed to stronger prices for summer 2025,” Froley said.

S&P Global Commodity Insights assessed its daily North West Europe LNG Marker (NWM) price benchmark for cargoes delivered in January on an ex-ship (DES) basis at $14.209/mmBtu on Nov. 14, a $0.20/mmBtu discount to the January gas price at the Dutch TTF hub.

Argus assessed the price at $14.220/mmBtu, while Spark Commodities assessed it at $14.20/mmBtu.

European interest in cargoes for next year was shown this week by two tenders by Poland’s Orlen and Turkey’s Botas, said Samuel Good, head of LNG pricing at Argus.

Competition between the Pacific and Atlantic basis have remained strong, with the arbitrage - moving cargoes from one place to another - for U.S. loadings holding open for prompt cargoes but shut for most exports planned for Q1, Good said.

The U.S. arbitrage to north-east Asia via the Panama Canal is currently also signalling U.S. cargos to north-west Europe, said Spark Commodities analyst Qasim Afghan.

In LNG freight, Atlantic rates have rose for the second week running to $22,000/day on Friday, while Pacific rates steadied at $23,750/day, the analyst added.