LNG Bunker Snapshot: European LNG prices slump $235/mt on Middle East peace hopes

Singapore-ARA spread widens to $109/mt

Bunker premiums narrow in three regions

Singapore faces competition from Chinese LNG bunker locations

Weekly changes in LNG bunker prices:

• ARA down by $235/mt to $1,638/mt
• Baltics down by $235/mt to $1,741/mt
• Singapore down by $139/mt to $1,747/mt

ARA

Rotterdam’s LNG bunker price has fallen by more than TTF, as its bunker premium has narrowed.

Front-month TTF has fallen by $4.08/MMBtu ($212/mt) to $28.77/MMBtu ($1,496/mt). Rotterdam’s bunker premium over TTF has gone from $3.17/MMBtu ($165/mt) a week ago to $2.73/MMBtu ($142/mt), and the Baltic premium from $5.15/MMBtu ($268/mt) to $4.71/MMBtu ($245/mt).

TTF fell sharply on 2 November after US President Donald Trump took a cautious stance on resuming military strikes against Iran, and slid further, as the US midterm election results fuelled hopes that the Middle East war could end soon, the Japan Organization for Metals and Energy Security (JOGMEC) said.

EU gas storage was 73% full on 8 November, down from 75% a week ago and holding 13% less gas than a year earlier, according to Gas Infrastructure Europe.

EU gas storage could be just 7% full by the end of March, if the Strait of Hormuz stays closed and Europe has a cold winter with weak renewable output, International Energy Agency (IEA) gas analyst Greg Molnár said.

Even with a mild winter and Hormuz reopening in January, storage would end the season 18% below its five-year average, leaving Europe needing much larger injections next summer, he added.

Singapore

Singapore’s LNG bunker price has fallen by nearly twice as much as JKM, but by less than the ARA’s, widening its premium over ARA from $13/mt a week ago to $109/mt.

Front-month JKM has fallen by $1.35/MMBtu ($70/mt) to $31.49/MMBtu ($1,637/mt). Singapore’s bunker premium over JKM has narrowed from $3.44/MMBtu ($179/mt) a week ago to $2.11/MMBtu ($110/mt).

Singapore's LNG bunker benchmark has slumped as suppliers in the port compete with Chinese LNG bunker locations, a supplier told ENGINE.

JKM fell for most of the week as signs of progress in US-Iran talks and the US midterm results eased worries over Middle East supply, JOGMEC said. It rebounded on 6 November as uncertainty over the region persisted and supply stayed tight.

Asian end-users showed little appetite for spot cargoes all week, and trading stayed subdued, JOGMEC added.

In other LNG bunker news, US floating LNG infrastructure company Excelerate Energy will supply up to around 307,000 mt/year of LNG for 11 years to AxDo Bahamas, a small-scale LNG and bunker venture formed by LNG bunker supplier Axpo and Bahamas-based Domicisle LNG, with the first deliveries expected next year.

US-based supplier Sawgrass LNG & Power has delivered around 320 cbm (143 mt) of LNG to a cruise ship in a truck-to-ship operation at Port Everglades in Fort Lauderdale, US.

Finnish engine maker Wärtsilä has switched one engine on each of three LNG carriers operated by Chevron Transport to spark-ignited gas operation, which it estimates cuts methane slip to 1.1% of fuel use.

Shipowners ordered 30 LNG-capable vessels in October, down from 48 in September, according to DNV.

By Erik Hoffmann

Please get in touch with comments or additional info to news@engine.online