LNG

Asyad Shipping has agreed to sell minority stakes in the companies that own its two newest carriers, Muscat LNG and Musandam LNG, to two Omani investors. The deal leaves Asyad with 80% of each vessel-owning company and brings domestic capital into the group’s gas-shipping platform.

LNG Canada passed a year of exports with feedgas near Phase 1 capacity. Across 106 loadings since the first sailing from LNG Canada since last June, South Korea took the largest single share, roughly one cargo in three, ahead of Japan at a quarter and China at just over a fifth.

South Korean shipbuilder Hanwha Ocean has completed the world’s first ship-to-ship transfer of LNG between two vessels while both were on sea trials off Geoje Island. This operational breakthrough involved the new-built Maran Gas Syros and GasLog’s Woodside Jirrubakura.

Trafigura has agreed to supply 1.5 mtpa of LNG to Korea Gas Corp (KOGAS) over ten years, beginning in 2026. Deliveries will include cargoes sourced from Cheniere Energy.

The Japanese government will participate in the Alaska LNG project, President Trump claims, raising pressure on South Korea to follow suit. Fresh investment will allegedly come from the $550 billion fund that Japan disclosed during tariff negotiations with the United States.

Gaztransport & Technigaz (GTT) of France has been hired by HD Korea Shipbuilding & Offshore Engineering (HD KSOE) to design the tank for a new LNG carrier, built on behalf of Purus. Hyundai Samho Heavy Industries (HSHI) is assembling the vessel, due for delivery in Q4-2027.

South Korean utility SK GA Ulsan has started operations of a 1.2 GW combined-cycle power station that can run on LNG and liquefied petroleum gas (LPG). Dual-fuel capability allows the plant operator to optimise fuel costs while guaranteeing stable electricity supply for 2.8 million households in the Korean port city.

European LNG buyers fail to significant attract more deliveries although prices were much higher in the first week of 2025 than early last year. “There is a stickiness in LNG trade flows to Asia,” Energy Aspects said, referring to structural demand growth and heavy demand for spot cargoes from less price-sensitive markets like Japan and South Korea.

Analysts at the London-based consultancy found that Asian LNG demand has so far only been growing by 6.0 million tons year-on year y in 2025, which is down from 16.1 Mt growth last year. But Europe still stays very reliant on the increments in global LNG supply to meet its minimum storage targets by end-October.

A price-sensitivity analysis on how much Asian gas markets can call on spot and divertible supply at different price levels, found that at $10–20 per MMBtu, a $1/MMBtu rise, equal to €3.24/MWh, in TTF prices only weakens non-European demand by 0.89 million tons per annum (mtpa).

“European prices are already near the top of the coal-to-gas fuel-switching range and we already expect Europe to just meet its storage targets, so a market tightening of 5 bcm (for example, from cold weather in Europe and Asia over Q1-25) could propel TTF prices up by around €13.50/MWh,” analysts commented.

Quick drawdown on inventories

Europe entered January with gas inventories at just 79.2 bcm, or 73% full – a decrease by 15.3 bcm y/y which makes it difficult to rebuilt stocks before the end of the gas year in October.

The fast-paced drawdown during the months of November and December 2024 had a substantial impact, considering lower Russian pipeline gas deliveries were not sufficiently offset by higher LNG deliveries and low demand. The stockdraw amounted to 25 bcm over the past two months, while Russian pipeline gas deliveries were 5.3 bcm, down from the five-year average of 18.2 bcm, while LNG receipts were up marginally to 22.6 bcm.

Analysts project Europe stocks to hit around 40 bcm (37% full) by end-March, anticipating further reductions in Russian pipeline gas supply through the first quarter of 2025 and gradually rising gas demand.

Global LNG markets have been pretty unphased by last week’s US election results: near-term demand fundamentals are net bearish as traders await the onset of more severe winter weather. Looking at Q1-2025, uncertainty abounds with regards to Egypt’s LNG demand due to insufficient domestic gas production and escalating tensions in the Middle East.

LNG price spreads between the Japan Korea Market (JKM) and the Dutch Title Transfer Facility (TTF) for balance of winter 2024/25 contracts have fallen, but analysts find this drop is "overdone". London-based Energy Aspects forecasts the JKM-TTF spread will rise above US shipping differentials via the Panama Canal, openig the arbitrage for US spot cargoes to head to Asia.

Spreads narrowed to $0.53/MMBtu in recent days, down from around $1.13/MMBtu in mid-September – with little fundamental change. Though freight rates have fallen, key US shipping differentials via the Panama Canal have delinked only by an average $0.18/MMBtu month-on-month.

Energy Aspects hence upholds its bullish view on bal-winter outturn JKM prices, mainly due to their bullish views on TTF winter 2024–25 prices due to rising geopolitical tensions in the Middle East and systematic buying at the TTF near-curve.

The likely end of Russian gas transits through Ukraine starting from January 2025 and Europe’s rising gas demand in an average winter may lead to supply constraints in the EU, which in turn propel up fuel prices. “Our base case outturn JKM price forecasts average $14.55/MMBtu, $0.85/MMBtu above the latest CME settlements,” they explain.

LNG buyers worldwide have launched tenders for 22 cargoes so far this month, with eight of these confirmed, against 10 cargoes tendered and confirmed last October. Of the 80 cargoes tendered in September, 53 were confirmed and 40 were bought by Asian companies.

“Japan has bought three spot cargoes via tender issued month-to-date, with two December deliveries and one January delivery,” analysts disclosed. LNG stocks held by major Japanese power utilities, a subset of aggregate LNG stocks, reached 2.02 million tons, up from a multi-month low of 1.63 Mt two weeks ago.

Indian buyers continue to issue buy tenders, which analysts believe is “likely to stock up pre-emptively before power demand increases in late October due to Diwali.” Indian LNG inventories are understood to be quite high currently.

China’s Sinopec, meanwhile, secured a December delivery via tender, after about a year of not purchasing any cargoes through tenders. Chinese LNG stocks at ten selected LNG terminals have reached 1.93 Mt, up by 0.33 Mt year-on-year.