GAS | LNG

2 min read

LNG Weekly – EU imports jump to 5-month high amid Arctic blast

(Montel) LNG deliveries to Europe and Turkey jumped 37% last week to a five-month high of 3.8bcm as a cold blast in northern parts of the region buoyed demand, Kpler ship-tracking data showed on Monday.

However, imports may decrease to around 3.4bcm this week, with forecasts pointing to slightly milder conditions in the week ahead.

Temperatures across Europe would remain below reference for the remainder of this week before climbing to normal levels by next week, according to forecaster SMHI.

The freeze in northern parts of Europe since the start of the year has fuelled demand for gas in heating and power generation, analysts have said, with much of the supply coming from piped flows from Norway amid relatively healthy storage levels.

So far in January, European imports of LNG have tumbled 9% to 7bcm compared with the same time in December, Kpler data showed.

LNG in storage was last seen at 48% full, three percentage points lower week on week, according to Gas Infrastructure Europe. By comparison, storage of natural gas was hovering around 80% full.

The abundance of gas has weighed on European gas prices, with the Dutch TTF benchmark slumping to a five-month low on Monday of EUR 29.80/MWh.

Middle East turmoil
European prices shrugged off fresh supply concerns related to Middle East turmoil.

Qatar Energy, the world’s biggest LNG exporter, may divert its vessels around South Africa's Cape of Good Hope to avoid transiting the Suez Canal, amid increasing hostilities in the region, Montel reported earlier.

Yemen's Houthi rebels have attacked at least two dozen times cargo ships in the Red Sea, a major route for global maritime trade, while a US-led coalition has launched military strikes against key sites in Yemen. The crisis has prompted some major shipping companies to take the longer route around southern Africa.

Rising geopolitical tensions contributed to resilient prices in Asian LNG prices, which held near USD 11/MMbtu, analysts at ANZ pointed out.

“This sparked increased activity in the spot market [and] magnified opportunistic buying following the recent selloff which has seen prices in the region fall to a six-month low,” it said.

The arbitrage window between Asia and Europe remains open, with a very narrow spread in the profitability of shipping a US cargo to either basin.

Delays in the Panama Canal are still favouring European discharges slightly though, offsetting the price premium offered in JKM prices against the European equivalents, according to Spark data.

European LNG imports
Countries:Previous weekMonth to date
Belgium0.180.72
Croatia0.100.10
Finland0.050.05
France0.741.10
Germany0.180.28
Greece0.090.23
Italy0.340.56
Lithuania0.000.08
Malta0.000.00
Netherlands0.460.76
Poland0.220.22
Portugal0.080.08
Spain0.340.59
Turkey0.360.98
UK0.661.31
Total3.827.05

*Previous completed vessel arrivals, including discharge, according to Montel calculations based on Kpler estimates

European LNG storage levels (GIE)
CountryLatest    (% of capacity)Previous week
Belgium2749
Croatia9760
France5551
Germany4849
Greece3434
Italy2946
Lithuania3776
Netherlands7551
Poland4126
Portugal4648
Spain3855
EU combined4851