LNG Bunker Snapshot: Rotterdam's price surges amid heatwaves in southern Europe

Rotterdam's LNG bunker price shot up last week due to heatwaves across southern Europe and ongoing supply constraints from Norwegian outages and maintenance activities.

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

Changes in weekly LNG bunker prices:

• Rotterdam up by $75/mt to $708/mt
• Singapore up by $16/mt to $781/mt

Rotterdam

Rotterdam has seen a notable massive in its LNG bunker price in the past week, rising by $75/mt to $708/mt. The underlying Dutch TTF Natural Gas contract rolled from the August contract to the higher-priced September contract last week, which has contributed to raise the TTF benchmark.

Heatwaves across Spain, Portugal and the south of France have driven up prices, compelling these areas to import more spot LNG to meet the increased demand, according to Rystad Energy. Heatwaves lead to higher electricity consumption for cooling, thereby increasing the demand for LNG as a fuel for power generation.

Moreover, Norwegian operator Equinor is currently dealing with an outage at the Visund field. It does not know how long it will last. There is also an annual maintenance going on at the Norwegian Kaarsto gas-processing facility, which is expected to last until early August, Rystad Energy added.

However, EU gas stores are more than 85% full, and well above their five-year average of 76%, as noted by ING’s Warren Patterson.

Singapore

Singapore's LNG bunker price has risen by $16/mt, reaching $781/mt. This increase is driven by a higher NYMEX Japan/Korea Marker (JKM) price.

The Ichthys LNG Train 2 in Australia, with an export capacity of 4.45 million mt/year, is operating at approximately 80% capacity following an outage on 19 July. The facility is anticipated to continue operating at a reduced capacity through August, Rystad said. Ichthys LNG is a key supplier of LNG to the Asia-Pacific region.

China, Japan and South Korea are forecast to experience above-average temperatures until 13 August, which will likely keep gas demand high, Rystad added.

In Japan, the Nuclear Regulation Authority has rejected the restart of Unit 2 at Japan Atomic Power's Tsuruga Nuclear Power Plant, further supporting gas demand.

LNG-to-power demand is expected to remain strong next month due to lower nuclear availability, marking the first such occurrence since 2022, according to Joachim Moxon, an LNG analyst at ICIS. Lower nuclear power availability means more reliance on LNG for electricity generation, increasing demand.

Singapore's LNG bunker price premium over Rotterdam has narrowed considerably, from $132/mt last week to $73/mt now.

By Debarati Bhattacharjee

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