LNG

European and Asian liquefied natural gas prices rebounded from three-year lows as cooler weather and the return of government energy policy uncertainties offset high global storage levels and concerns over trade route insecurity.

European classification society DNV said there were a total of 29 LNG alternative-fuelled vessels added to its the database in August and September as the sector showed continued growth and lower LNG bunker prices in markets like Rotterdam helped to improve the shipping economics outlook.

Liquefied natural gas and pipeline market prices in Europe rebounded with the benchmark Dutch Title Transfer Facility gaining ground on the week even amid ample supplies in storage, firm Atlantic Basin LNG cargo flows and seasonally milder weather, while there was still a lack of a serious demand upturn for North Asian spot LNG cargoes, though prices were firm.

The UK Isle of Grain LNG import terminal, the largest in Europe and located on the Medway River in the southeast English county of Kent, reported a 60 percent surge in cargo deliveries in the past year and when more gas was supplied to the UK and the European Union.

Europe has now entered an unusual period of having a temporary natural gas glut in the mid-winter season as several European Union nations this week built gas storage levels amid very mild weather and the Germans preferred coal and oil to gas for electricity generation, while the LNG arbitrage window opened to over $2 for the Japan-Korea Marker price for spot cargo deliveries to Japan, China and South Korea.

Production from the Njord oil and natural gas field in the Norwegian Sea has just resumed to supply Europe following a landmark upgrading project in which both the platform and the floating storage and offloading vessel (FSO) were brought ashore and overhauled before being towed back to sea and re-fitted to the fields.

North Asian spot cargo prices increased 4.4 percent on the week while the Dutch Title Transfer Facility benchmark price jumped by more than twice as much as leading European Union LNG nations made withdrawals from gas storage as temperatures dropped below zero in Germany and elsewhere.

High demand and cargo valuations are prevailing again in the liquefied natural gas market with more shipments pointing at North Asia at 5 percent lower prices than last week amid heavy traffic also around European regasification facilities as the high-flying European Union benchmark edged higher on the week by another 2 percent.

GRTgaz, the French gas grid company with three liquefied natural gas import terminals under its control, began transporting pipeline gas to Germany after reversing the normal flow on the only link between the two nations and since then European Union day-ahead spot gas prices have dropped, though other influences have been at play.

The International Energy Agency said Russia’s continued curtailment of natural gas flows to Europe had pushed international prices to “painful” new highs, disrupted trade flows and led to acute fuel shortages in some emerging and developing economies.