- Russia-Ukraine Conflict Disrupts Gas Flows, Pushing Prices Higher
- Norwegian Maintenance and Falling Gas Storage Levels Tighten Supply
- Singapore LNG Bunker Prices Rise as Regional Demand and Supply Issues Persist
Global LNG bunker prices are to and fro as a result of the prevailing geo-political tensions, supply challenges, and seasonal shifts in demand. However, in Rotterdam, they are moving upwards amid European supply concerns as a result of the Russia-Ukraine conflict. In Singapore, supply is constrained by regional supply constraints as well as high demand for LNG in Asia, reports Engine.
Rotterdam LNG Bunker Prices
Rotterdam’s LNG bunker price increased by $4/mt to $853/mt last week, which reflected gains in the Dutch TTF Natural Gas contract. The latter hikes fuel concerns over Europe’s gas supply stability.
Impact of Russia-Ukraine Conflict
The Russia-Ukraine conflict has further shattered the gas markets. Ukraine last week accused Russia of striking Dnipro with an intercontinental missile, where threats were reportedly made over Russian gas supplies to Europe.
With the current gas transit agreement set to lapse this year, Ukraine has said no to negotiations on prolongation, adding to the uncertainty. Adding to the pressure was Gazprom’s halt of gas deliveries to Austria’s OMV, which jeopardized supply stability via Ukraine once again.
Storage levels and Norwegian maintenance
Rystad Energy said the volume of gas in Europe’s inventories had fallen to under 90%, below the five-year average for this time of year. That means there is less buffer to break up demand in the winter months and push prices up.
In addition, maintenance at Norway’s Dvalin and Heidrun fields from Nov. 26 through Dec. 3 will reduce supply further.
Singapore LNG Bunker Prices
Singapore’s LNG bunker price climbed $37/mt to $889/mt last week, influenced by supply challenges and rising demand in Asia.
Production issues at Brunei LNG, a major regional supplier with 7.2 million mt annual capacity, have disrupted supply, contributing to price increases.
Japan’s Seasonal Demand
Colder weather in Japan has increased demand for heating and electricity generation. The country is one of the world’s largest LNG importers, so an increase in Japanese demand weighs on regional pricing, such as in Singapore.
Nuclear Restarts Offer Partial Relief
The country’s nuclear power plants are modestly taking a little load off LNG demand. The Onagawa plant from Tohoku Electric and the Mihama plant from Kansai Electric have restarted, slashing some 100,000 mt/month in LNG demand.
However, Rystad Energy believes these cuts are too meagre to compensate for the general seasonal peak demand for LNG.
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Source: Engine
