LNG Bunker Snapshot: Rotterdam sees price hike, Singapore demand surges

LNG bunker prices have risen in Rotterdam and especially in Singapore, where demand has grown to put pressure on bunker slot availability.

PHOTO: Pavilion Energy's LNG bunker vessel Brassavola delivering a stem to a Rio Tinto-chartered bulk carrier. Pavilion Energy

Changes in weekly LNG bunker prices:

• Rotterdam up by $8/mt to $543/mt
• Singapore up by $42/mt to $639/mt

Rotterdam

The uptick in Rotterdam’s LNG bunker price was primarily driven by a combination of supply concerns and increased spot demand from buyers in the wider gas market.

The port's LNG bunker price increase aligns with an upward trend in the benchmark TTF (Title Transfer Facility), reflecting broader LNG market dynamics. LNG bunkering, while a small segment of the overall LNG market, is linked to the larger market trends.

Liquefaction trains at the Freeport LNG export plant in Texas, US will likely be shut down for weeks. These trains are key to liquefying and compressing natural gas into LNG, and two in three of them will remain out of service until May, Freeport said.

“Although historically Freeport LNG plant has sent most of its cargoes to Japan and South Korea, since the onset of sanctions on Russian material, it has been sending more cargoes to Europe," Sparta Commodities analyst Samantha Hartke tells ENGINE.

European gas storage levels fell slightly from over 60% last week, to 59% this week. European gas storage levels are often correlated with gas prices, including benchmarks like TTF. However, this marginal drop is unlikely to have made a significant impact on LNG bunker prices in the past week, given the overall robustness of storage levels compared to previous years.

Early last week, European gas prices were rising sharply due to an unplanned outage and supply disruptions at a major Norwegian gas field, a report from Denmark Energi stated.

Supply disruptions often contribute to price volatility in the natural gas market. If there is a significant reduction in supply due to the outage, it can lead to price spikes in natural gas, including LNG, which can affect LNG bunker prices.

However, as the week progressed, prices moderated, influenced by mild weather conditions and improved Norwegian gas flows.

“The LNG market is likely to tighten somewhat with Asian demand increasing, but the European supply situation still shows itself rather robust for now," Denmark Energi added.

Looking ahead, the global LNG market could be transformed if the EU extends carbon taxes to cover LNG imports, according to a report from Wood Mackenzie.

“If the EU decides to apply these levies, then this will push European gas prices up but also bifurcate the global LNG market, creating a two-tier LNG market,” the vice-president of gas and LNG research at Wood Mackenzie Massimo Di Odoardo said.

Singapore

In Singapore, LNG bunker prices saw a significant increase of $42/mt.

Demand for LNG bunkering has surged this week, with bunker delivery slots filling up rapidly. For April dates, slots are already becoming scarce, an LNG trader tells ENGINE.

Factors influencing the Asian LNG market, including JKM (Japan-Korea Marker) prices, also impact LNG bunker prices in Singapore, the trader says.

Price-sensitive buyers from China, India and southeast Asia continued to capitalise on lower prices by increasing their spot LNG purchases, Hartke says.

India's plans for significant LNG consumption growth towards 2030, and its long-term supply deals with companies like Vitol Asia, signify a growing LNG market. And China's LNG imports are forecasted to expand by 8.1% in 2024, according to China National Petroleum Corp.

If emissions taxes are extended to Asia, it could influence LNG prices significantly in the region, as suppliers need to recover the cost of the additional tax, Wood Mackenzie noted.

By Debarati Bhattacharjee

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