LNG

The arbitrage for flexible US LNG cargoes heading to Asia is open with spreads between the Japan Korea Marker (JKM) and the Dutch TTF widening, as the tepid recovery of Qatari and UAE LNG exports is unlikely to outpace rebounding Asian demand.

Vietnamese authorities in Nghe An province are urging PV Power to accelerate development of the $2.25 billion Quynh Lap LNG-to-power project with a view to bringing the 1,500 MW plant into operation by 2030 – even as imported fuel costs weigh on profitability.

Fast-growing Asian demand for cross-basin LNG cargoes has widened price spreads between the Japan Korea Marker (JKM) and the Dutch TTF for the July–September period. An uneven recovery in Hormuz carrier transits risks delaying a return to “normal” exports until October.

Regional US gas prices in the Southwest and Southern California are trading near zero, even as LNG export demand hits maximum capacity. Domestic gas output exceeds 105 Bcf/d, flooding storage and capping upside, while LNG feedgas demand increased to 20.3 Bcf/d amid soaring US LNG export driven by panic buying.

US LNG exporters are selling cargoes abroad at prices roughly twice the Henry Hub benchmark, allowing export demand to set a higher clearing price in the domestic power market. Data from the US Energy Information Administration (EIA) shows the average LNG export sale price was $7.87 per thousand cubic feet (Mcf) in 2025 versus $3.66/Mcf for Henry Hub.

The arbitrage for shipping US LNG cargoes to Northeast Asia has fallen to –$0.2/MMBtu, the lowest level since February 2025 – even though Atlantic freight rates have declined by more than $70,000 per day over the past month, a move that would typically bolster Asia-bound LNG shipping.

Traders and LNG portfolio players are competing for regasification capacity to land LNG cargoes in Europe, though the European LNG arbitrage stayed closed for much of 2025. According to Platts data, the economics begin to reflect oversupply with the LNG-TTF price spread widening.

Energy Aspects remains bearish against JKM–TTF Q1 26 spreads amid dwindling freight rates. Some recent fixtures for two-stroke LNG vessels in the Atlantic basin fell below $100,000 per day, opening the arbitrage for US LNG heading to markets east of Suez via the Cape of Good Hope.

Asian economies take advantage of falling LNG prices by switching from gas- to coal-fired generation. “Around 30% of the 380 billion cubic metres (bcm) of gas demand growth has come from coal-to-gas switching since 2010, and virtually all of this happened in China," the International Energy Agency (IEA) finds.

LNG demand growth east of Suez is expected to exceed regionals supply, so Asian buyers are looking to pull some flexible Atlantic cargoes to balance. Energy Aspects is bullish against JKM-TTF spreads over the balance of 2025, though call on cross-basin is lower this year as contractual term cover in the top five Asian markets – China, Japan, South Korea, Taiwan and India – has fallen to 82% in 2025.