LNG Bunker Snapshot: Rotterdam’s Price Swells On Ukraine Attacks

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  • Rotterdam up by $51/mt to $593/mt
  • Singapore down by $20/mt to $632/mt

Rotterdam’s LNG benchmark has surged due to supply concerns in Europe, while Singapore’s price has dropped with lower delivery costs, reports Engine.

Rotterdam

Rotterdam’s LNG bunker benchmark experienced a notable surge, rising by $51/mt to $593/mt over the past week. The price increase has come amid a $38/mt spike in the front-month NYMEX Dutch TTF Natural Gas benchmark, and as LNG bunker delivery costs are estimated to have gone up by $13/mt on the week to $117/mt.

The recent TTF benchmark hike can be attributed to new gas supply concerns in Europe, particularly after Russian attacks on Ukraine’s energy infrastructure. This market uncertainty was exacerbated when the European Parliament approved draft rules enabling countries to restrict Russian gas imports, Energi Denmark said.

Reports of operational issues at the Freeport LNG export liquefaction plant in the US might also have contributed to the price hike, the Danish trading company noted.

While there are some supply concerns facing the market in the short term, fundamentals are still bearish given the comfortable storage levels and we suspect any strength in TTF will be short-lived,” head of commodities strategy at ING Warren Patterson commented.

Singapore

Singapore’s LNG bunker price went the other way and fell by $20/mt to $632/mt last week. The drop came despite a $5/mt uptick in the underlying JKM gas benchmark. This is because the LNG bunker delivery cost was estimated to have come off by $26/mt to $130/mt.

While LNG remains an attractive option for bunkering, demand dipped slightly last week compared to previous weeks, according to a trading source.

The upward trend in the JKM price has been driven by buying interest for June and geopolitical tensions following Russian attacks on Ukrainian storage sites, the Japan Organization for Metals and Energy Security (JOGMEC) said in a report.

In March, Singapore’s LNG bunker sales surged by 12,000 mt, reaching an all-time high of 39,000 mt. This marks the fourth consecutive month of growth in LNG bunker sales for the port, growth that has partly been fuelled by cheaper LNG prices compared to VLSFO and oil-to-gas switching.

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Source: Engine