LNG

Macro bullishness abounds in European LNG, gas and power markets after US President Trump threatened to levy 25 percent tariffs on anyone who keeps doing business with Iran. Markets overreacted, with one gas broker describing the “move up on spreads for September vs October as well as Q4 vs Q1 “completely panic driven.”

Nick Flores, CEO of the Coastal Bend LNG project, has highlighted the inclusion of carbon capture and storage (CCS) as a ‘central feature’ of the company’s proposed liquefaction terminal in Texas. CO2 emissions from the onsite power plant will be captured, moved by pipeline for sequestration and long-term underground storage.

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.

Shipping companies and LNG portfolio players are slowly returning to the Panama Canal, where a two-year drought restrained traffic. As northern-hemisphere winter weather is sending natural gas demand soaring, most US LNG cargoes are currently looking for a home in Europe and avoid having to queue up for a costly Panama Canal transit.

Spot gas prices at the Henry Hub jumped 56 percent over the course of 2025, averaging $3.52 per million British thermal units (MMBtu), based on data from London Stock Exchange data. Feedgas demand for LNG exports increased by an estimated 3 billion cubic feet per day (Bcf/d) in 2025 as more liquefaction capacity comes online.

The Egyptian government has signed contracts worth more than $1.8 billion with Norway’s Scatec and China’s Sungrow in a bid to expand clean power generation and reduce LNG import dependency.

Commonwealth LNG, majority-owned by Kimmeridge, has received a 20-year regulatory permit to export LNG to countries without free trade agreements (non‑FTA) with the United States, adding to a 25-year FTA export permit. Both authorizations will become effective once the LNG terminal starts commercial operations, or within seven years of issuance.

Sinopec, one of China’s largest LNG importers, and China National Aviation Fuel Group (CNAF) have embarked on a restructuring process to prepare a merger. The plan has been approved by the Chinese State Council and would marginally support Chinese LNG demand through higher jet fuel and SAF-linked gas use, while strengthening state control on long-term LNG contracting.

Hanwha Ocean has secured an order worth 2.59 trillion won ($1.75 billion) to build seven LNG carriers for an undisclosed European shipowner. The South Korean shipbuilder said the order highlights continued demand from European owners as the region seeks to secure long-term LNG supply and modernise its shipping fleet.

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.