LNG

Gazprom said the booking for the transit of Russian natural gas via Ukraine remained at the same level of previous days on the third day of the Nord Stream 1 pipeline maintenance shutdown as more LNG cargoes head for the European Union to partially offset the lower gas volumes.

North Sea Brent crude oil prices rose to their highest level in seven-and-a-half years as European natural gas and LNG cargo prices gained 20 percent after Russia said it was taking military action in neighbouring majority ethnic-Russian areas of Ukraine.

Natural gas wholesale futures prices in Europe broke records for a second day in a market of contrasts as sky-high prices for spot LNG carrier charters have finally crashed for both the East of Suez and West of Suez markets and by up to $70,000 per day.

Liquefied natural gas prices for deliveries to China, Japan and South Korea soared to more than $20 per million British thermal units for November amid a rise in cargo liftings at global liquefaction plants as record prices in Europe pointed to a possible winter supply crunch.

April 28 (LNGJ) - Qatar is delivering the first two LNG cargoes to the UK in May. The 261,700 cubic metres capacity carrier “Lijmiliya” is scheduled to arrive in the UK from Ras Laffan on May 1 with a shipment for the South Hook facility in the Welsh port of Milford Haven, according to the port authorities. Another Qatari carrier, the 266,000 cubic metres capacity vessel, the “Al Dafna”, is due to berth at South Hook on May 5.

   The latest shipments are scheduled as the UK National Balancing Point natural gas benchmark price and the main Continental European price, the Dutch Title Transfer Facility (TTF), are both at seasonal highs. Both prices were quoted at the equivalent of $7.60 per million British thermal units.

Demand for liquefied natural gas cargoes was at a firm seasonal level as liftings increased and prices rose again for spot shipments to North Asia, while European gas market benchmarks were around $7.50 per million British thermal units.

April 2 (LNGJ) – Another Qatari cargo from Ras Laffan in the Gulf is heading for the UK. The 261,000 cubic metres capacity Q-Max carrier “Rasheeda” is currently making its way through the West Mediterranean after traversing the Suez Canal and is scheduled to berth on April 9 at the South Hook import terminal at the Welsh port of Milford Haven, according to shipping data. The National Balancing Point natural gas benchmark price is at a seasonally firm level of $6.50 per million British thermal units, while the main Continental European price, the Dutch Title Transfer Facility (TTF), is even higher at the equivalent of $6.60 per MMBtu.

Global liquefied natural gas plants lifted the pace of cargo loadings in the week even as previously very high winter season prices for physical North Asia spot cargoes moderated and the February futures contract expired.

UK natural gas prices hit a record level as system operator National Grid issued warnings on supply deficits and more coal-fired power was required in the absence of LNG shipments mostly drawn to North Asia by higher spot prices.

Global pricing agency Platts said the Japan-Korea Marker (JKM) price for liquefied natural gas assessed by the US firm rose to a record high of $20.705 per million British thermal units

Asian spot LNG prices are riding at six-year highs, as a cold spell in some countries in North Asia prompted record imports into the region.

While Platts reported the temporary record $20.705 trading level, though the February settled prices were still generally at around $15.550 per MMBtu.

The March price was at $9.550 per MMBtu and April was quoted at $6.500 per MMBtu.

Analysts said demand from Japan has pushed up North Asia spot cargo prices.

Jera Co. Inc., Japan’s biggest power generator and the world’s largest buyer of LNG, as well as other Japanese electricity and gas companies, are competing with LNG buyers in China and South Korea to secure supplies.

Platts said that the situation also meant that fewer cargoes were coming to Europe than is usual for this time of year.

The UK National Balancing Point benchmark gas price had been firm over the past week though has now fallen under $7.00 per MMBtu.

The NBP was last at $6.95 per million British thermal units while the continental European Dutch Title Transfer facility (TTF) price was lower at the equivalent of $6.35 per MMBtu.

“A major demand stimulus for the recent price increase was the cold snap across northeast Asia which has boosted gas consumption and accelerated drastic inventory draw-down in Japan, South Korea and China,” explained Platts.

“On the supply-side, production issues in countries such as Malaysia have depleted availability and led to delayed or deferred deliveries of LNG, as well as reduced volumes stipulated under long-term contracts,” it added.

US Gulf Coast LNG prices were lower. The February derivative contracts for FOB cargoes has declined to $5113 per MMBtu from
$6.400 per MMBtu.

The March price also fell back on the week to $4.883 per MMBtu from $5.929 per MMBtu. The April GCL price was from $4.532 per MMBtu.

Additionally, there have been shipping traffic constraints in the Panama Canal, meaning vessels carrying shipments from the US Gulf Coast have experienced longer shipping times into the Pacific region.

“This has meant more cargoes are expected in Asia in the later weeks of February or in March,” stated Platts.

Platts said it forecast a drop in Asia-Pacific demand through the first quarter. Even if some supply outages continue through March, prices were likely to decline.