TTF and JKM rise higher as Asia and Europe compete for natural gas – LNG recap

Natural gas prices in Europe and Asia continued to rise last week and again ended strong on Monday as regions competed for supply.

Persistent cold in Europe, coupled with a drop in pipeline imports and an increase in the Japan-Korea Marker (JKM) contract, are supporting prices on the continent, where storage stocks remain around 25% below the five-year average. Below normal temperatures are expected to continue in the UK, France, Germany, Italy, Hungary, Poland, Scandinavia and the Balkans this week, while the 6-10 day period looks more normal , according to Maxar’s Weather Desk.

“All factors are supporting the uptrend right now, such as cold spring temperatures across Europe, supply issues regarding Russia due to the relationship with Ukraine and the boom in the carbon market are supporting all takeover, ”trading firm Energi Danmark said in a note on Monday. Day-ahead gas at the Dutch Title Transfer Facility (TTF) hub last week hit its highest level since January, while the first-year contract hit a more than two-year high.

Fast TTF and National Balancing Point contracts both surged above $ 8.00 / MMBtu on Friday, while futures on JKM approached $ 9.00. Spot prices in North Asia broke the $ 9.00 mark on Monday as prices climb due to competition with Europe and a continued need to replenish inventory after a cold winter.

Engie EnergyScan also said a blackout at the Troll field reduced Norwegian gas pipeline imports to 260 million cubic meters (MMcm) on Friday, from 306 MMcm on Thursday. Russia’s supply problems escalate as military tensions simmer with Ukraine along the border. Russian flows edged down to 327 MMcm on Friday from 329 MMcm on Thursday, Engie said.

Gazprom PJSC said last week he saw European demand for spring gas at similar levels to winter. Despite the tensions, the company has reserved additional pipeline capacity through Ukraine. It plans to ship 497 billion cubic meters of natural gas this year, up 9.6% from 2020.

Other commodities also climbed last week. The quick Brent contract hit some of its highest levels since March last week and closed higher on Monday. The forward curve suggests the market is increasingly confident in a global economic recovery, said Robbie Fraser, analyst at Schneider Electric.

The Organization of the Petroleum Exporting Countries and its allies, aka OPEC-plus, have confirmed they will go ahead with previously announced production increases. The cartel has agreed to add, from May, more than 2 million bpd of oil to the market by July, amid rising expectations of rising demand this summer and fall.

In the United States, meanwhile, heavy electricity consumption and a three-day rally in Nymex natural gas futures have pushed up spot gas prices for the April 26-29 trading period, which covered gas delivery until April 30. West Coast markets led the way, spurring NGI’s Weekly Spot Gas National Avg. 8.5 cents at $ 2,700 / MMBtu.

The May Nymex futures contract also expired at $ 2.925 after three straight days of gains in the mild spring. Strong export demand carried the burden on futures for most of the week, but Thursday’s storage data led to a pullback of the new June contract before it climbed two cents to close. at 2.931 Friday.

Liquefied natural gas (LNG) shipments to the United States again exceeded 11 Bcf / d for most of last week.

The shipping industry is also reaping the benefits of a tight global gas market, with vessel prices continuing to rise. Daily rates for a 174,000 cubic meter vessel in the Atlantic Basin were $ 93,000 on Monday, up from $ 70,000 at the same time last week, according to a broker. Fearnleys AS. Ship rates in the Pacific Basin were $ 83,000 on Monday, up from $ 59,500 a week ago.

There are few ships available in both basins, Fearnleys analysts said, adding that those who need ships in the Atlantic have occasionally purchased them in the Pacific, which is rare for this time of year. .

Elsewhere in the expedition, Chenière Energy Inc. say it Challenger MOL loaded at its Sabine Pass LNG export terminal in Louisiana last week. The company said it was the largest ship to ever take a shipment of LNG to the United States. The ship can carry 258,000 cubic meters of LNG, compared to an average ship that can carry up to 175,000 cubic meters.

Also on the Gulf Coast, Venture Global Inc. say it Zachary Group and KBR Inc. have formed a joint venture to execute the development, engineering, procurement and construction of the first phase of the Plaquemines LNG export project approximately 20 miles south of New Orleans. The first phase would have a capacity of 10 million metric tons / year.

In Australia, Santos Ltd. said it would shut down a train at its Gladstone LNG plant for maintenance between May 9 and June 7. Chevron Corp. also said later in the week that it expects LNG production to be cut until June due to ongoing issues at its Gorgon LNG plant in Australia.

Maintenance has closed part of the terminal in Australia, which Chevron operates with a 47.3% stake. Last year, he temporarily took the system offline for repairs after finding weld cracks. Inspections for a third train are scheduled for June, with repairs to follow if necessary. But the company expects all three trains to run in 3Q2021.

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