LNG

The United States and China have extended a bilateral trade truce – the so-called Busan Agreement – until January 10. The accord reduces the risk of renewed tariff escalation between the world’s two largest economies, but does not include a commitment that China will buy US LNG.

Lithuania’s Ignitis has agreed to buy U.S.-linked LNG from EQT, under a sales and purchase agreement (SPA) covering 10 cargoes delivered each year between 2027 and 2036. The deal marks Ignitis first long-term SPA with a US company and introduces Henry Hub-linked pricing into its procurement portfolio.

Bangladesh has approved in principle a proposal by China National Energy Engineering & Construction Co (CNEE) to build and operate the country's third floating LNG import terminal, despite the Chinese company's regasification fee being substantially higher than those of existing terminals.

Gasunie has warned the Netherlands will not meet its 115 TWh gas storage target for this winter. Storage is currently just 44-45% full, the lowest since 2009, as utilities shy away from buying LNG at current high prices.

Stalled US-Iran negotiations are manifesting LNG price premiums this autumn, with the average price for an October cargo delivered to Northeast Asia forecast at $22.50 per MMBtu. The geopolitical premium is firmly engrained in global LNG markets, fuelling a bullish sentiment in Asia where the price of delivered LNG increased by$0.85/MMBtu week-on-week to nearly$22.10/MMBtu.

High-risk operators of LNG carriers are seen exploiting a shortage of shipowners willing to transit Hormuz. At least four very large gas carriers with a history of carrying Iranian LPG have loaded cargoes in the UAE and Qatar in recent weeks, according to Lloyd’s Lists findings with analysts noting that before the conflicts, it was rare for vessels linked to sanctioned trades to re-enter mainstream markets.

Two LNG tankers seem to have conducted a ship-to-ship (STS) transfer outside the Strait of Hormuz, as suppliers seek to keep fuel moving from inside the Persian Gulf to global markets.

Soaring LNG trade flows from the US and Canada have offset around 70% of the lost supply via the Strait of Hormuz, though further military escalations in the region and delays in restoring Qatari exports keeps could prolong market tightness into 2027, the International Energy Agency (IEA) warns.

Security costs rather than freight fundamentals are increasingly determining LNG shipping economics. Owners face "between 6 and 10 million dollars for every single shipment" before vessels enter the Strait of Hormuz, simply to secure additional insurance cover, said Tom Beney, Senior Vice President of Ocean Freight at StoneX.

Woodfibre LNG, positioned as the world’s first net zero LNG export facility, is more than halfway complete and targets end-2027 for in-service, CEO Luke Schauerte said. Addressing potential labour shortages, he told BNN Bloomberg the project is “in a really good spot (…) sort of between the waves of building.”