Asia LNG prices edge higher as European gas soars
03:26, 17 December 2021
The price of liquefied natural gas (LNG) in Asia continued to advance lifted by record-high gas prices in Europe as disruptions on Russia’s gas supply continued.
Platt’s Japan-Korea Marker for February delivery traded at $43.44/MMBtu (metric million British thermal unit) on Thursday, up from $43.20/MMBtu on Wednesday. The contract rose 18.3% from a week ago but was still about 22% lower than the record-high of over $56/MMBtu on 6 October.
“North Asian LNG futures edged higher, supported by the strong gains in the European market,” analysts at ANZ Research wrote in a note on Friday.
Gas and LNG prices have been supported by the energy crisis in Europe sparked by low inventories and uncertainty on the start of the Nord Stream 2 pipeline which will boost gas supply from Russia to the continent. Europe accounts for 95% of Russia gas exports and around 95% of this is transported via pipeline, according to Julius Bär.
Soaring gas price
European gas futures closed at record highs on Thursday after data indicated Russian gas exports to Germany through the major Yamal pipeline were not expected on Friday, Reuters reported.
Dutch TTF hub, the European benchmark gas futures price, closed at €142.76 per megawatt hour on Thursday after hitting €146.16/MwH.
“Gazprom failed to book any pipeline space to deliver gas toward Germany through Poland at a day-ahead auction. The potential decline in flows comes as a cold snap is forecast for next week, which could see Europe drawdown its already low inventories even further,” according to ANZ Research analysts.
Asia demand muted
Buying of the super-chilled gas in Asia was muted with buyers in the region satisfied by current inventory levels, ANZ Research analysts said.
According to S&P Global, Asia’s top LNG importers like China and Japan are reporting healthy gas stocks despite cold weather setting in.
LNG stocks held major power utilities in Japan rose 8.7% to 2.37 million metric tonnes on 12 December from 2.18 million tonnes the week before, S&P Global reported, citing data from Japan’s Ministry of Economy, Trade and Industry.
S&P Global reported that China’s national oil companies are not seen offering LNG cargoes despite higher inventories and softening domestic prices as they are cautious about winter supply.