Europe LNG Demand Is So Hot That Cargoes Land at Wider Discounts
It's getting cheaper to bring a shipment of liquefied natural gas into Europe because of heightening competition between terminals to accommodate extra cargoes.
The delivered price of LNG for northwest Europe widened its discount to the continental benchmark Title Transfer Facility in recent weeks, according to data from Spark Commodities Pte Ltd. The price difference was as much as minus 71.5 cents last week, according to the data.
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By Curtis Williams HOUSTON (Reuters) -U.S. liquefied natural gas output fell in May due to plant outages and maintenance at the country's largest export facility, preliminary LSEG ship tracking data show. The U.S. is the world's largest LNG exporter and monthly changes in production can impact global LNG prices. In May the U.S. exported 8.9 million metric tons of LNG, down from a record 9.3 MT in April, according to LSEG data. During May all U.S. plants experienced short periods of lower output when compared to April, the LSEG data showed, and Cheniere Energy confirmed that its 30 MT per annum (mtpa) Sabine Pass facility in Texas, the biggest in the nation, was undergoing maintenance work. Gas flows to Sabine have held at a 23-month low of around 3.1 bcfd since May 31. That compares with an average of 4.3 bcfd over the prior seven days. Freeport LNG, the U.S.' third largest LNG producer, also reported several outages. Europe remained the favored market for U.S. LNG exports as traders tried to take advantage of higher prices in Europe for the superchilled gas when compared to Asia. Gas prices at the European benchmark Title Transfer Facility (TTF) in the Netherlands rose to $11.68 per million British thermal units (mmBtu) in May, up from $11.48 in April and an average of $10.12 in May 2024. Of the 8.9 MT of LNG exported from the U.S., 6.05 MT or 68% went to Europe, the same percentage as in April, LSEG data showed. Exports to Asia remained relatively low with 1.88 MT or 21% of total exports, compared to 2.05 MT or 22% of total exports in April, LSEG data showed. Stronger domestic production, pipeline imports, renewable generation and weak industrial demand have kept Chinese demand muted and China, the world's largest LNG user, continues to resell U.S. LNG to avoid paying retaliatory tariffs as the trade dispute continues between the world's two largest economies. Prices at the Asian benchmark Japan Korea Marker (JKM) slid to $11.83 per mmBtu in May, down from $12.23 in April but up from an average of $11.10 in May 2024. Exports to Latin America also fell with .66 MT sold in May compared to .68 MT in April. Egypt bought 3 cargoes for a total of .22 MT, while Bahrain bought one cargo for .07 MT. One cargo also left Cheniere's Sabine Pass plant on May 23, but as of Monday was in the Caribbean Sea with no clear destination, LSEG ship tracking data showed. The United States is poised to remain the world's largest LNG exporter with an expected 6 projects getting the financial go ahead in 2025, adding another 90 million metric tons per annum (mtpa) of LNG to the U.S. output by 2030. Errore nel recupero dei dati Effettua l'accesso per consultare il tuo portafoglio Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati
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Europe LNG Demand Is So Hot That Cargoes Land at Wider Discounts
It's getting cheaper to bring a shipment of liquefied natural gas into Europe because of heightening competition between terminals to accommodate extra cargoes. The delivered price of LNG for northwest Europe widened its discount to the continental benchmark Title Transfer Facility in recent weeks, according to data from Spark Commodities Pte Ltd. The price difference was as much as minus 71.5 cents last week, according to the data.
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Most years, few have to worry about natural gas from April to September. In Europe, the winter season is over and, barring a small number up north, everyone else switches off the heat. But 2025 will be different. Europe will need to worry about gas exactly when it shouldn't: during the spring and summer. The result will be another year of high gas prices, further darkening the future of the region's energy-intensive manufacturing sector. Households, too, will feel the hit. The higher-for-longer outlook for gas prices just got a bit higher and longer. The cost of gas in Europe, measured by the so-called Title Transfer Facility benchmark in the Netherlands, has risen above €50 ($51.41) per megawatt hour, among the highest price levels over the last two years. The reasons are twofold. First, Ukraine – understandably — didn't renew at the end of 2024 a transit contract that allowed its archenemy Russia to ship gas into Europe via its pipelines. Russia doesn't sell as much gas into Europe as it once did, but Moscow has remained an important supplier for countries including Slovakia, Austria, Italy, Czechia and Hungary. The loss of that Russian gas will force Europe to rely more heavily on other sources, such as US liquefied natural gas and its own storage. But inventories aren't unlimited. And here lies the second reason: Europe has already taken out an abnormally large amount of gas from its tanks. From Oct. 1 to Dec. 31, gas withdrawals from underground depots amount to over 250 terawatt hours, the second-largest ever for the period, and well above the 10-year average of 165 TWh.
