LNG

Risk management experts have claimed that Platts’ JKM benchmark has a lower basis risk, compared with the deeper liquidity but higher basis risk of non-Asian gas indices.

Asian spot LNG prices fell to their lowest levels in nearly a year last week.

Record flows to LNG export plants and forecasts of higher gas demand this week than previously expected, resulted in US natural gas futures rising by 1% on Monday.

Gas futures for May delivery on the New York Mercantile Exchange (NYMEX) rose 3.5 cents, or 1%, to $3.562 per MMBtu.

This small increase came despite record output over the weekend and forecasts for less demand next week than expected, newswires reported.

Gas stockpiles were currently about 4% below normal levels for this time of year, after cold weather in January and February forced energy firms to pull large amounts of gas out of storage, especially in January, which saw record amounts withdrawn.

Financial analyst LSEG said average gas output in the Lower 48 US states rose to 106.3 bill cu ft per day thus far in April, up from a monthly record of 106.2 bill cu ft in March.

Output record

On a daily basis, output hit a record 107.4 bill cu ft on Saturday and Sunday, topping the previous all-time high of 107.3 bill cu ft per day on 24th March.

Looking forward, analysts said energy firms could cut back on oil drilling in the coming weeks, due to the around 13% drop in US crude futures this month.

The crude price drop was related in part to uncertainty tied to US President Trump’s on-off trade tariffs.

Any reduction in oil drilling in the shale basins, such as the Permian in Texas and New Mexico and the Bakken in North Dakota, could boost gas prices by cutting gas output associated with the production.

Meteorologists projected temperatures in the Lower 48 states would remain mostly warmer than normal through 29th April.

With seasonally milder weather coming, LSEG forecast average gas demand in the Lower 48, including exports, will fall from 101 bill cu ft per day this week to 97.2 bill next week.

The average amount of gas flowing to the eight large US LNG export plants climbed from a monthly record of 15.8 bill cu ft per day in March to 16.3 bill cu ft thus far in April, on rising flows to Venture Global’s 3.2 bill cu ft per day Plaquemines export plant under construction in Louisiana.

This week, gas was trading at a near six-month low of around $11 per MMBtu at the Dutch Title Transfer Facility (TTF) benchmark in Europe and at an eight-month low of around $13 per MMBtu at the Asian Japan Korea Marker (JKM) benchmark. 

Europe's LNG imports are set to increase by 25% this year.

Taiwan state-backed energy companies could buy an extra $200 bill of US LNG in 10 years.

Following Russia’s invasion of Ukraine, Chinese companies signed a flurry of LNG deals, while European buyer hesitated to commit to long-term contracts, the Institute for Energy Economics and Financial Analysis (IEEFA) said in a report.

Russia's LNG exports under the Government’s approved Energy Strategy through 2050 will reach 142 bill cu m in 2030 and 241 bill in 2050, Russian newswire Interfax reported.

By comparison, Russia's LNG exports totalled 45 bill cu m in 2023.

The strategy’s key performance indicators (KPIs) included increasing LNG production from 32.34 mill tonnes in 2023 to 90-105 mill tonnes by 2030, 110-130 mill tonnes by 2036, and 110-175 mill tonnes by 2050.

Specifically, to achieve the production target of 100 mill tonnes by 2030 involved the completion of Arctic LNG 2 (19.8 mill tonnes) and the Ust-Luga project (13.2 mill tonnes), while constructing the Obsky LNG (4.8 mill tonnes), Murmansk LNG (20.4 mill tonnes) and Arctic LNG 1 (19.8 mill tonnes) in addition to the existing projects, such as Sakhalin 2 (9.6 mill tonnes) and Yamal LNG (17.4 mill tonnes).

‘LNG will play a significant role in global gas trade, due to its flexible logistics. By 2050, the total capacity of proposed LNG plants could approach 1 bill tonnes, more than doubling current levels.

‘Consequently, competition in the global LNG market will only intensify,’ the Russian Government’s strategy document said, Interfax reported.

Elsewhere, Russian energy giant, NOVATEK’s total hydrocarbon production was 169.1 mill barrels of oil equivalent for the first quarter of this year.

This includes 21.35 bill cu m of natural gas and 3.48 mill tonnes of liquid hydrocarbons (gas condensate and crude oil), which was an increase of 1% or 1.7 mill barrels of oil equivalent, compared to 1Q24.

Preliminary total natural gas sales volumes, including LNG, was 21.48 bill cu m, an increase of 0.1%, compared with the same period in 2024.

NOVATEK also processed 3.4 mill tonnes of unstable gas condensate, which was 1.9% higher, compared to corresponding volumes processed in 1Q24. In addition, the company processed 2.2 mill tonnes of stable gas condensate, representing an increase of 59.9%, compared with the previous period.

Preliminary liquid hydrocarbons total sales volumes totalled 4.5 mill tonnes, which was 5.4% higher than in 1Q24.

As of 31st March, 2025, NOVATEK had 0.2 bill cu m of natural gas, including LNG, and 1.7 mill tonnes of stable gas condensate and petroleum products in storage or transit and recognised as an inventory. 

Argentine energy company, YPF and Italian giant, Eni signed a Memorandum of Understanding (MoU) yesterday to study the development of the Argentina LNG integrated project’s phase.

TotalEnergies has exercised an LNG purchase option on Train 4 of NextDecade’s Rio Grande LNG facility and agreed to sell LNG to the Dominican Republic.

State-owned GAIL India has issued a tender to acquire up to a 26% stake in a US LNG project, together with a 15-year gas import agreement for 1 mill tonnes per year, starting by 2029/2030.

This move was thought to be made to support India's efforts to reduce its trade surplus with the US.

Late last week, India was attempting to become one of the first to agree a trade deal with the US, as President Donald Trump's announcement of sweeping tariffs has triggered a trade war with China and efforts by other countries to negotiate.

India's largest gas distributor has invited initial bids from companies, as it seeks to buy equity in an existing LNG liquefication project or a new project that would be commissioned by 2030 at the latest, a document published on its website said.

No US projects have been named as potential candidates thus far.