Asian buyers are seeking more LNG spot cargoes and shoring up long-term supply while Europe awaits the impacts from further cuts of Russian natural gas imports and global terminal outages.
Prices in east Asia rose to the mid-$12/MMBtu range to start off the week amid a fresh wave of spot purchases and tenders. Korea Middle Power Co. Ltd. (KOMIPO) purchased a cargo for delivery in mid-July, according to data from Kpler. Thailand’s PTT LNG Co. Ltd. also is seeking three liquefied natural gas cargoes through July.
One of South Korea’s largest LNG buyers, Korea Gas Corp. (Kogas) also opened a short-term and long-term tender for up to 2.1 million metric tons/year (mmty) each.
Meanwhile, supply in the Pacific has been limited by several outages at key facilities in Australia, Brunei and Malaysia. Brunei LNG Sdn Bhd is reportedly still working to restore operations at the more than 7 mmty facility at Lumut after a compressor issue early last week. Two vessels were waiting around Burnei LNG anchorage Tuesday, according to Kpler.
The outage adds to supply pressure from issues at the Bintulu LNG complex in Malaysia operated by Petronas, which has been offline since a May 10 power issue. One of three trains at Chevron Corp.’s Gorgon LNG in Western Australia, which mainly serves Asia, also remains offline and could be offline for another week.
The potential for growing competition from Asia isn’t stirring European buyers just yet, despite a forecast of higher temperatures in northwestern Europe and the Nordics through next week.
The Dutch Title Transfer Facility (TTF) edged downward Tuesday from near $11 at the end of last week, supported by a ramp up of production in Norway. July TTF landed near $10.761, the lowest point in a week.
Analysts from trading firm EnergiDanmark said the drop could be representative of a wait-and-see approach as trading activity remained low while prices slightly rose across the curve.
“Focus remains on the remaining Russian gas supply to Europe, and whether or not Austria will have to suspend its gas purchase from Russia during the coming weeks,” analysts said.
Austria’s OMV AG warned last week an undisclosed company won a favorable court ruling that could potentially impact its payments to an affiliate of Gazprom PJSC. Speculation has been rising about whether the development would mean one of the few companies still importing Russian pipeline gas into western Europe could be cut off.
Asian buyers also dominated supply contract announcements to start the week. KOMIPO locked in an extension for its supply and purchase agreement with Vitol Inc. for three cargoes each year through 2028. Vitol has delivered more than 4 mmty to South Korea through its agreement with KOMPIO since 2015.
Japanese and South Korean buyers have been moving to replenish stocks and refresh expiring long-term contracts in the face of more global supply uncertainty through the decade.
Hokkaido Gas Co. Ltd. also disclosed a 0.4 mmty agreement with Santos Ltd. for 10 years from its equity LNG portfolio. Volumes are expected to be delivered on an ex-ship basis starting in 2027. Hokkaido Gas and Santos also signed tentative agreements to explore carbon capture and e-methane export projects.
In the United States, Wood Mackenzie estimates Tuesday showed daily production hovering around 98-99 Bcf/d, lagging year-earlier output of around 102 Bcf/d.
Estimated LNG feed gas demand ticked up to 13 Bcf/d thanks to sustained flows to a recently revived Freeport LNG and greater nominations from Sempra Infrastructure’s Cameron LNG. Wood Mackenzie estimated feed gas flows could drop to 12.5 Bcf/d over the next seven days.
Scheduled maintenance is expected to begin at Cheniere Energy Inc.’s Sabine Pass LNG next week and continue through mid-June.
