Wednesday, 09 March 2022 06:09

Spare LNGC Capacity as Prices Rocket

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Our data show there is substantial idle LNGC capacity totalling around 2.21mmt in all three Basins. The largest share of idle vessels is located in the Atlantic Basin. 

Many of the affected vessels have not left their locations in weeks. The increase in underutilised capacity coincides with yet another steep rise in oil and gas prices as well as a sharp drop in LNG flows in February. 

Our data show there is substantial vessel capacity currently sitting idle in both the Atlantic and Pacific Basins. Several of these vessels have not left their general locations for several weeks. 

lng market tracker march 7 2022

Idle capacity

 The bulk of idle vessel capacity is in the Atlantic Basin, where the largest share is currently situated in the Mediterranean.

Around 0.65mmt in nominal capacity are waiting or circling in the wider Gibraltar Strait area and off Malta.

Concurrently, we are seeing 0.42mmt congregating around the island of Tenerife and 0.22mmt in the English Channel. Meanwhile, there is roughly 0.46mmt in idle capacity waiting to the east of Singapore.

Other locations in the Caribbean, Southeast Asia, the Gulf of Mexico and the Persian Gulf account for a total of around 0.46mmt, our data indicate.

Demand downturn

LNG trade has seen a distinct downturn in February, according to our data, with large importers such as China and South Korea having reduced their offtakes by almost 4.0mmt month-on-month.

European demand was also down by more than 1.50mmt net in February.

The ongoing crisis in Ukraine and resulting sanctions on Russia have propelled Brent prices to levels not seen since 2008 and 2013.

The surge in Brent as well as concerns over tight gas supply following Russia’s invasion of Ukraine had an immediate knock-on effect on both long-term, oil-linked as well as spot LNG prices.

Record-high prices

The LNG Japan/Korea Marker (Platts) Futures for April stood at almost US$52/mmBtu and at almost US$56/mmBtu for May, at the time of writing, suggesting spot cargoes in the Far East are priced above even these record-high levels.

In India, prices reported by the Indian Gas Exchange have breached the US$34/mmBtu mark in March whilst a February spot cargo tender by Pakistan LNG Ltd. for delivery in mid-March resulted in only two bids of US$25.12/mmBtu and US$26.16/mmBtu by ENOC Singapore and QP Trading, respectively. 

Steady Russian LNG to Europe

Meanwhile, we have not yet detected a slow-down in Russian LNG exports to Europe. Exports by Yamal LNG to European buyers have kept apace in February.

Yamal LNG deliveries to European terminals have remained broadly steady at 1.33mmt, our data show, whilst for the first seven days of March imports grew by 0.06mmt (15pct) to 0.45mmt compared to the same period in 2021.

ABS, the American Bureau of Shipping, said the first liquefied natural gas-powered Newcastlemax bulk carrier in an order of 13 ABS-classed vessels for Eastern Pacific Shipping has been fuelled with LNG in a bunkering operation at Singapore, and was now heading for Australia to load iron ore for Asia.

Wednesday, 02 March 2022 07:15

Market Tracker Supplement - 28 February 2022

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Wednesday, 02 March 2022 07:00

Market Tracker - February 28, 2022

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Wednesday, 02 March 2022 06:24

Calcasieu Pass LNG Ships Maiden Cargo

The United States launched into March by exporting the first cargo from Venture Global’s new Calcasieu Pass LNG development via the JERA-controlled Yiannis.

Wednesday, 23 February 2022 06:40

Market Tracker Supplement - 21 February 2022

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Wednesday, 23 February 2022 06:32

Market Tracker - February 21, 2022

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Supermajor Shell has reportedly called for urgent reform to a ‘combustible mix’ of declining domestic gas production and policy gaps in relation to gas utilisation.

Thursday, 17 February 2022 10:00

Monthly Data Supplement - February 2022

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Thursday, 17 February 2022 09:56

Monthly Data - February 2022

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