Europe's imports of LNG are on the rise, but not to Asia's detriment: Russell
In December, Europe's LNG imports reached an 11-month record high. However, this was not at the expense Asia, who also saw higher arrivals.
According to commodity analysts Kpler, Europe imported 10.89 million tons of super-chilled gasoline in December. This is up 23% compared to 8.86 million in Novembre and the highest amount since January, when 11.18 millions were imported.
The increase in imports from Europe was a result of a rise in winter demand and the impending end of Russian pipeline shipping through Ukraine, which will begin at the beginning of 2025.
The increase in European LNG purchases did not come at the expense for arrivals in Asia - the top importer region in the world.
Kpler data shows that Asia imported 25,63 million tonnes in December, up from 22,64 million tons in November, and the highest since 26.19 millions in January.
Asia's December figures were down 3.6% compared to the 26.58 millions tons in 2023. Europe saw a decline from December 2023 when imports totaled 11.75 million tonnes, which was 7.9% more than December 2024.
The mild winter that began in North Asia, coupled with the rising prices of spot markets, has likely dampened importer interest.
China, the largest LNG buyer in the world, saw 7.66 million tonnes of LNG arrive in December. This was down from the 8.20 million tons for the same period a year ago.
Japan and South Korea, Asia's second and third largest importers, also saw a small drop in their imports.
India, Asia's 4th-largest LNG importer, saw its December arrivals increase slightly on an annual basis. They came in at 1,94 million tons versus 1,86 million in December of 2023.
India's imports of LNG have declined since June when they reached a peak of 2,60 million tonnes for 2024. The lower arrivals coincided with the rising price for spot cargoes.
Spot LNG price for North Asia
This price would have encouraged Indian buyers to book spot cargoes that would take up to June for delivery.
The spot LNG price began to rise in March, with a peak of $15.10 at the end of November. By mid-June it had risen to $12.60 per million Btu, followed by $14.10 and then $15.10.
In the week ending Jan. 3, it has now dipped slightly, to $14.60 per MMBtu.
In the past, India has taken fewer spot LNG cargoes and even encouraged Chinese buyers of LNG to resell LNG.
EUROPE DEMAND
The cold weather in Europe is likely to keep natural gas prices on the continent stable, particularly since storages dropped last week and were just above 70% full, which was below the 85% of the same period last year, as well as the 76% average over the past five years.
The European price is high enough to encourage LNG spot cargoes to be shipped to the continent. The benchmark front-month contract for the Dutch TTF hub ended at 47.17 euro per megawatt hour – equivalent to 14.36 mmBtu.
Due to the loss of Russian gas pipelines through Ukraine, and the faster drawdown in inventories, Europe will likely keep LNG purchases higher than usual for the coming months. This may prevent the spot price from experiencing its seasonal decline when winter in the north ends.
There is the possibility, however, that an increase in LNG supply from the United States will be enough to meet any rise in European demand.
In December, Europe imported 5,22 million tons U.S. Liquefied Natural Gas, a record high for the 11 months and more than twice the 2,30 million in July, the weakest month of 2024.
Two new plants, Venture Global Plaquemines Stage 3 and Cheniere Corpus Christi Stage 3 (both starting production in December 2024) are expected to boost exports by 2025.
These are the views of the columnist, an author for.
(source: Reuters)
