LNG Bunker Snapshot: Rotterdam LNG bunker price surges on cold weather and weaker renewable energy output

Singapore-ARA spread narrows to $82/mt

Cold weather and weaker renewables lift Rotterdam's price

Rotterdam and Singapore bunker premiums broadly steady

Weekly changes in LNG bunker prices:

• Rotterdam up by $104/mt to $1,048/mt
• Singapore up by $12/mt at $1,130/mt

Rotterdam

Rotterdam’s LNG bunker price has jumped by $104/mt, tracking the rise in the front-month Dutch TTF natural gas contract. Over the past week, the benchmark has climbed by $2.05/MMBtu, to reach $17.60/MMBtu ($915/mt).

The surge in TTF price has been driven largely by “escalating geopolitical tensions in the Middle East, cold weather across Europe, and a decline in wind power generation,” according to the Japan Organization for Metals and Energy Security (JOGMEC).

“Slowing underground gas storage injections, falling temperatures and reduced wind power generation across Europe, and supply constraints caused by large-scale summer maintenance in Norway” have also contributed to drag the benchmark down, JOGMEC added.

“Although there are reports of a few Qatari LNG ships sailing through Hormuz, the Strait still appears closed,” according to Mind Energy.

“Colder weather in Europe coupled with lower renewables output is increasing the call on gas-fired power plants,” said Greg Molnár, gas analyst at the International Energy Agency.

EU underground gas storage was at 36.1% as of 15 May, down from 34.7% a week earlier and 17.6% lower year-on-year, according to Gas Infrastructure Europe.

“If we see Asian buyers coming into the spot LNG market to refill inventory/offset disrupted contracted volumes, this will increase competition between Europe and Asia for cargoes, which would push prices higher,” ING Bank’s head of commodities strategy Warren Patterson commented.

“If the EU aims to reach its 80-90% fill target in Asia, a hotter summer and stronger cooling needs could prompt a more aggressive LNG procurement strategy and hence drive-up competition with Europe,” Molnár echoed.

Singapore

Singapore’s LNG bunker price has increased by $12/mt over the past week to reach $1,130/mt. Its premium over Rotterdam has also narrowed significantly, with the Singapore price moving from a $174/mt premium a week earlier to $82/mt currently.

The rise has largely been driven by “increased spot demand from South Asia but also from China, as well as growing supply concerns stemming from technical issues at Freeport LNG in the US,” according to JOGMEC.

“Asian natural gas prices edged higher amid little sign of easing supply disruptions. This comes as pockets of demand for LNG have emerged in South Asia. India, Bangladesh and Pakistan have been seeking cargoes in recent weeks,” said ANZ Bank’s senior commodity strategist Daniel Hynes.

LNG “deliveries to China are showing signs of recovery,” said Stephen Stapczynski, Energy Asia team leader at Bloomberg News.

“There are rumours on domestic production outages in China which could increase the country's LNG import requirements,” according to IEA’s Molnár.

“Maintenance and unplanned outages at several US LNG plants is further tightening short-term supply fundamentals,” Molnár added.

Other LNG bunker news

The Busan Port Authority plans to develop LNG and methanol bunkering infrastructure at the port by 2032.

UK-based Centrica Energy has secured an ISCC Trader with Storage certification, enabling it to trade certified bio-LNG internationally.

Molgas-owned Titan Clean Fuels has chartered a new LNG bunker vessel to support physical deliveries in Zeebrugge and across the wider ARA hub.

By Tuhin Roy

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