LNG Bunker Snapshot: Rotterdam price extends rally amid tighter European gas supply

Singapore-ARA spread narrows to $60/mt

Low storage, strong demand support TTF

JKM supported by tighter US LNG arbitrage to Asia

Weekly changes in LNG bunker prices:

• Rotterdam up by $83/mt to $1,429/mt
• Singapore up by $46/mt to $1,489/mt
• Baltics up by $85/mt to $1,534/mt

ARA

Rotterdam's LNG bunker price has risen for a fifth consecutive week, tracking a stronger front-month Dutch TTF natural gas contract. TTF has gained $1.58/MMBtu ($82/mt) on the week to $25.21/MMBtu ($1,311/mt).

The ARA bunker delivery premium has edged wider to $2.27/MMBtu ($118/mt) from $2.25/MMBtu ($117/mt) a week ago. The Baltic bunker premium has also firmed, to $4.28/MMBtu ($223/mt) from $4.24/MMBtu ($220/mt).

Lower LNG supply and weaker wind generation lifted TTF early in the week, the Japan Organization for Metals and Energy Security (JOGMEC) said.

Unplanned outages at Norway's Kollsnes plant and the Troll field, warmer near-term forecasts and slower European storage injections also supported the contract, JOGMEC said.

TTF was trading almost 4% higher early on Monday, ING Bank head of commodities strategy Warren Patterson and commodities strategist Ewa Manthey said.

“European natural gas prices hit their highest since January 2023… as renewed hostilities in the Middle East dashed hopes of a revival in LNG supply,” said ANZ Bank senior commodity strategist Daniel Hynes.

EU underground gas storage facilities were 66% full on 4 September, up from 64% a week earlier. Stored volumes were 16% lower than a year earlier, when facilities were 79% full, according to Gas Infrastructure Europe.

“Storage levels in Europe are extremely low ahead here at the start of autumn and with French nuclear production still hampered after a summer of heat waves, gas consumption remains high,” Mind Energy said.

“Tightening supply fundamentals, low storage levels and stronger than expected demand are all providing upward pressure on gas prices, together with renewed geopolitical tensions,” International Energy Agency (IEA) gas analyst Greg Molnár said.

Singapore

Singapore's LNG bunker price has risen by less than Rotterdam's, narrowing its premium over the Dutch port to $60/mt from $97/mt a week ago.

Singapore's LNG bunker prices typically track the front-month NYMEX Japan/Korea Marker (JKM), which has gained $0.91/MMBtu ($47/mt) to $24.09/MMBtu ($1,253/mt).

Singapore's bunker delivery premium has eased to $4.54/MMBtu ($236/mt) from $4.58/MMBtu ($238/mt).

A geopolitical risk premium tied to the Middle East has continued to support JKM, JOGMEC said.

Supply concerns lifted JKM earlier in the week as US cargoes lost their arbitrage to Asia and buyers in Europe and Asia competed harder for volumes ahead of winter, JOGMEC said.

“Europe will be competing against increasingly desperate Asian buyers,” ANZ Bank's Hynes said.

In other LNG bunker news, classification society Lloyd’s Register (LR) has approved the design of a new 12,500-cbm LNG bunker vessel.

Shipping company Eastern Pacific Shipping (EPS) has taken delivery of three LNG dual-fuel bulk carriers from China’s Qingdao Beihai Shipbuilding.

LNG-capable vessels accounted for 46 of the 52 alternative-fuel vessel orders placed in August, according to DNV senior consultant Kristian Hammer. Container ships dominated the LNG orderbook with 30 vessels, followed by 12 car carriers.

Container shipping company Yang Ming has ordered six LNG dual-fuel container ships from South Korean shipbuilder Hanwha Ocean.

Molgas-owned bunker supplier Titan Clean Fuels plans to charter a new LNG bunker vessel as it expands its physical supply operations across the western Mediterranean.

Chinese state-owned shipping company COSCO Shipping has ordered 12 LNG dual-fuel container ships, with deliveries scheduled towards 2030.

Hong Kong-based shipping company Orient Overseas Container Line (OOCL) has unveiled the second vessel in its planned series of seven methanol-capable newbuilds.

Meanwhile, Swedish shipping company Furetank and its partners have ordered four new dual-fuel product tankers.

By Tuhin Roy

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