LNG Bunker Snapshot: Prices jump on supply risks and Strait of Hormuz disruptions

LNG bunker prices in Rotterdam and Singapore have rallied, driven by tightening global gas supply and escalating risks around the Strait of Hormuz.

Weekly changes in LNG bunker prices:

• Rotterdam down by $63/mt to $957/mt
• Singapore down by $86/mt at $1,066/mt

Rotterdam

Rotterdam’s LNG bunker price has climbed by $63/mt, tracking gains in the front-month Dutch TTF natural gas contract. Over the past week, the benchmark has risen by $1.37/MMBtu to $15.48/MMBtu ($805/mt).

The surge in TTF prices has been largely driven by tightening supply dynamics, with “continued supply restrictions due to intermittent planned and unplanned shutdowns at several gas production facilities in Norway, as well as growing expectations of a continued blockade of the Strait of Hormuz,” according to the Japan Organization for Metals and Energy Security (JOGMEC).

Market sentiment has also shifted, with “European natural gas prices gained… as hopes of end to supply disruptions evaporated,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Additional support has come from weather and energy output expectations. “Expectations of further cooling and a decrease in renewable energy generation,” have also contributed to upward pressure on prices, JOGMEC added.

“Cooler temperatures next week, until early May, were also taken into consideration,” according to Mind Energy.

Meanwhile, EU underground gas storage stood at 31.19% on 24 April, up from 29.9% a week earlier, but still 17.5% lower year-on-year, based on data from Gas Infrastructure Europe.

Singapore

Singapore’s LNG bunker price has surged over the past week, rising by $86/mt to $1,066/mt. Consequently, the premium over Rotterdam has widened from $86/mt a week ago, to $109/mt.

LNG bunker pricing in Singapore typically follows the NYMEX Japan/Korea Marker (JKM). The front-month contract climbed by $1.56/MMBtu over the week to $16.56/MMBtu ($861/mt), reinforcing the upward trend in bunker prices.

Geopolitical risks have been a key driver, with “the continued blockade of the Strait of Hormuz,” playing a major role in pushing prices higher, according to JOGMEC.

“North Asia LNG prices pushed above… as the ongoing closure of the strait disrupts more than a fifth of world supply,” said Daniel Hynes of ANZ Bank.

Additional pressure has come from potential supply disruptions in Australia. “Concerns about a strike at Ichthys LNG in Australia on the 24th also fueled the price increase,” according to JOGMEC.

“Workers at Inpex’s Ichthys LNG export project in Australia have voted to strike, which could halt production if the dispute is not resolved, the union representing employees said in a statement,” Stephen Stapczynski, Energy Asia team leader at Bloomberg News.

The significance of the project underscores market sensitivity. “Ichthys accounts for about 2% of global supply and has the capacity to export around 9.3 million tons a year, mainly to Japan,” Stapczynski added.

Meanwhile, Japan’s LNG inventories for power generation stood at 2.22 million mt on 19 April, down by 70,000 mt from the previous week, based on data from Ministry of Economy, Trade and Industry.

Other LNG bunker news

Spanish ferry operator Baleària has begun sea trials for its new LNG dual-fuel catamaran, Mercedes Pinto, in Gijón, Spain.

In the UK, Portland Port has secured approval to conduct LNG ship-to-ship (STS) transfer operations, including bunkering services.

Meanwhile, a container vessel operated by Mediterranean Shipping Company has been supplied with approximately 2,300 mt of LNG at Mawan Port in Shenzhen, China.

By Tuhin Roy

Please get in touch with comments or additional info to news@engine.online