LNG Bunker Snapshot: Singapore LNG bunker price surges amid Middle East supply concerns

Singapore-ARA spread widens to $163/mt

TTF rises for third consecutive week

JKM climbs amid tightening gas market

Weekly changes in LNG bunker prices:

• Rotterdam up by $70/mt to $1,279/mt
• Singapore up by $102/mt to $1,442/mt
• Baltics up by $70/mt to $1,385/mt

Rotterdam

Rotterdam’s LNG bunker price has jumped by $70/mt, mirroring gains in the front-month Dutch TTF natural gas contract. Over the past week, TTF has climbed by around 6% to $22.41/MMBtu ($1,165/mt).

The latest rally in TTF prices has been driven by the escalating US-Iran tensions and growing concerns over energy shipments through the Strait of Hormuz.

“Given that the situation around the Strait of Hormuz is seemingly far away from any positive change for the energy complex, and the US threatening Iran with more sanctions to crush their economy, the European gas… gained,” Mind Energy commented.

European gas prices have also risen as the market faces potential disruptions to Middle East supplies, according to ANZ Bank’s senior commodity strategist Daniel Hynes.

TTF prices have seen further upward pressure “as geopolitical tensions increased following Russian attacks on Ukraine’s gas infrastructure,” according to the Japan Organization for Metals and Energy Security (JOGMEC).

“Attacks on gas infrastructure in Ukraine and Romania supported additional upside volatility in recent weeks,” commented International Energy Agency gas analyst Greg Molnár.

Norwegian supply disruptions have also contributed to the rally. “Reduced gas supply from Norway caused by unplanned maintenance at the Karsto gas processing facility, as well as concerns over securing sufficient inventories for winter amid limited injections into EU gas storage,” have added to upward pressure on TTF, JOGMEC added.

EU underground gas storage facilities were 62.3% full on 24 July, up from 60.4% a week earlier. However, inventories remained 17.5% below the level recorded at the same time last year, according to Gas Infrastructure Europe.

Storage levels remain a key concern. “EU inventories are… below their five-year average, with filling now on track to be the lowest since 2013. Low storage levels are adding further upward pressure on prices all along the forward the curve,” the IEA’s Greg Molnár said.

“The fundamental situation on the market is tightening further, with a shut Strait of Hormuz, year-low nuclear availability in France and very low storage levels,” Mind Energy added.

Meanwhile, strong summer demand has also supported gas prices. “Sizzling heatwaves, low hydro and nuclear outages boosted gas-based power generation,” Molnár further stated.

Rotterdam’s LNG bunker price has also been supported by a 5% increase in the assessed LNG bunker premium, which rose from $108/mt to $114/mt.

Singapore

Singapore’s LNG bunker price has surged by $102/mt over the past week to $1,442/mt. As the increase outpaces Rotterdam’s, Singapore’s LNG bunker premium over the Dutch port has widened to $163/mt, from $131/mt a week earlier.

LNG bunker prices in Singapore typically track the NYMEX Japan/Korea Marker (JKM). Over the week, the front-month JKM contract rose by $1.72/MMBtu to $22.94/MMBtu ($1,193/mt).

The rise in JKM was “supported by geopolitical tensions,” according to JOGMEC. The agency added that “the narrowing JKM-TTF spread raised concerns over tightening spot LNG availability in Asia.”

North Asian LNG prices have also gained as buyers seek additional cargoes amid supply disruptions in the Middle East, according to Hynes.

Singapore’s LNG bunker price was further supported by a 6% increase in the assessed LNG bunker premium, which rose from $236/mt to $249/mt.

Meanwhile, the port's LNG sales increased by 7% in July to 59,000 mt. Total LNG sales for the first seven months of the year reached nearly 377,000 mt, up from 286,000 mt a year earlier.

Elsewhere in the LNG bunkering sector, Chinese shipbuilder Nantong CIMC Sinopacific Offshore & Engineering (CIMC SOE) has secured a contract from an undisclosed European shipowner to construct a 6,000 cbm LNG bunkering vessel.

Maran Tankers Management (MTM), part of Greek shipping company Angelicoussis Group, has taken delivery of the fourth of eight LNG dual-fuel oil tankers being built by China’s New Times Shipbuilding.

LNG bunker vessel Avenir Advantage has completed its first LNG bunker delivery to a Royal Caribbean Group cruise ship in Honduras, marking the bunker vessel’s first supply operation for the cruise line in the region.

The European Commission has cleared Stolt-Nielsen’s sale of a 50% stake in Avenir LNG to Japanese shipping company Nippon Yusen Kabushiki Kaisha (NYK Line).

Singapore-based global shipping company Eastern Pacific Shipping (EPS) has completed its 700th LNG bunkering operation. The milestone was reached while bunkering the vessel Lake Victoria at the German port of Emden.

German engine manufacturer Everllence, formerly known as MAN Energy Solutions, has partnered with China’s Hudong-Zhonghua Shipbuilding to develop a 180,000-cbm LNG-capable vessel.

Meanwhile, a vessel operated by Taiwanese container shipping company Yang Ming has received 2,000 mt of LNG in a simultaneous ship-to-ship (STS) bunkering operation at the Port of Shanghai.

At the Luhuashan anchorage in the Port of Shanghai, Shanghai International Port Group (SIPG) Energy has carried out a simultaneous bunkering operation involving two vessels using different fuels. One of the vessels, bunker tanker Hai Gang Wei Lai, delivered an unspecified quantity of LNG to Pacific International Lines’ (PIL) containership Kota Elan.

Mitsui O.S.K. Lines (MOL) said its fourth LNG dual-fuel very large crude carrier (VLCC) will be deployed under a time charter to Norwegian energy company Equinor.

By Tuhin Roy

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