Should I Stay Or Should I Go – Will Asia Start Pulling Large Volumes of LNG Away From Europe?

2022 was a particularly significant year for the global LNG industry, distinguished by a sharp increase in LNG demand in Europe tied to the reduction in flows of Russian pipeline gas after Putin’s invasion of Ukraine. Whereas Europe had historically been the last market option for many LNG sellers, it became the most highly priced market in the world and pulled in LNG from multiple locations, including a cargo from Australia delivered in October. Paying premium prices enabled European buyers to fill the continent’s underground storage at an unprecedented rate — as of mid-January, storage there was over 80% full. A mild winter, at least to date, coupled with conservation efforts and fuel switching have reduced European natural gas demand by 10% to 15% and helped avoid a gas shortage. Now, gas prices (and LNG cargo prices) have fallen to pre-invasion levels and prompted market observers to suggest that, with China emerging from pandemic-related lockdowns, Asia may start pulling large volumes of LNG its way. In today’s RBN blog, we examine LNG cargo movements within the Asia Pacific and Atlantic regions and what rising Asian demand could mean for European gas supplies going forward.

via RBN Energy

Categories: Energy