LNG Bunker Snapshot: Rotterdam price gains on low EU gas storage and Middle East tensions

Singapore-ARA spread narrows to $34/mt

TTF rises on Middle East supply risks and low EU gas storage

JKM rises on tight near-term fundamentals and potential Hormuz disruptions

Weekly changes in LNG bunker prices:

• ARA up by $121/mt to $1,553/mt
• Singapore up by $21/mt to $1,587/mt
• Baltics up by $121/mt to $1,658/mt

ARA

Rotterdam’s LNG bunker price rose for the second consecutive week, gaining $121/mt week-on-week to $1,553/mt.

The increase was primarily driven by an approximately 10% rise in the front-month Dutch TTF Natural Gas contract over the week. TTF is Europe’s benchmark gas price. Rotterdam’s LNG bunker premium was unchanged at $2.62/MMBtu ($136/mt).

TTF rose, supported by concerns over supply disruptions related to the Middle East situation and Europe’s relatively low gas storage levels, according to the Japan Organization for Metals and Energy Security (JOGMEC).

“TTF prices soared... since the end of September nearing once again... amid tanker attacks and continued geopolitical tensions in the Middle East,” said International Energy Agency (IEA) gas analyst Greg Molnár.

It continued to rise as market participants refocused on winter supply risks and European gas storage levels remaining well below the previous year’s level, JOGMEC said.

EU-wide underground gas storage stood at 72.2% on 2 October, up from 70.6% the previous weekend and 13.3% below the same period last year, according to Gas Infrastructure Europe.

“EU gas storage is just shy of 73% full. This is down from 83% at the same stage last year, and below the 5-year average of 88%. While injections have been stronger than the seasonal average through September, the region will still struggle to hit storage targets ahead of the winter,” two analysts from ING Bank noted.

“Storage levels across the country are growing before heating season really kicks in, but levels are still significantly below seasonal normal,” Mind Energy said.

“Apart from the renewed escalations in the US-Iran conflict, the market responded to several other supply issues, including from Norway,” Mind Energy added.

Singapore

Singapore’s LNG bunker price has risen less than the ARA price, narrowing its premium over ARA to $34/mt from $134/mt a week earlier.

Singapore’s LNG bunker price typically tracks the front-month NYMEX Japan/Korea Marker (JKM), which has risen by $0.27/MMBtu ($14/mt) to $25.98/MMBtu ($1,351/mt).

JKM was supported by concerns over tight near-term market fundamentals and potential disruptions to LNG shipments through the Strait of Hormuz, JOGMEC said.

A higher Singapore LNG bunker premium also supported the price, moving from $4.41/MMBtu ($229/mt) a week ago to $4.54/MMBtu ($236/mt).

“North Asia LNG prices also gained, following the news of the attack. Spot prices are now more than double pre-conflict levels,” said ANZ Bank’s senior commodity strategist Daniel Hynes.

In other LNG bunker-related developments, Japan’s first LNG bunker vessel Kaguya has delivered 200 LNG stems since 2020.

Terminal operator Singapore LNG (SLNG) has started construction of a third jetty at its Jurong Island terminal, which could increase its LNG bunkering capacity to 3 million mt/year.

Norway-based shipping firm Wallenius Wilhelmsen is in advanced discussions with shipyards to order four LNG-capable vessels for delivery by 2030.

Bunker supplier Peninsula has delivered an unspecified quantity of LNG to a Kawasaki Kisen Kaisha (K-Line) vessel at the Port of Sagunto in Spain.

German shipyard Meyer Werft is building a fourth LNG-capable cruise ship for US-based operator Disney Cruise Line.

French shipping company CMA CGM has contracted marine engine manufacturer Wärtsilä to supply 36 LNG dual-fuel engines for 12 container vessels under construction at China’s Jiangnan Shipyard.

Malaysian energy company MISC Group has launched a new LNG dual-fuel carrier, Th’ailib, at South Korea’s Samsung Heavy Industries.

The fourth LNG storage tank at Gate Terminal on Maasvlakte in the Port of Rotterdam has been completed and commissioned, adding 180,000 cbm of storage capacity.

By Tuhin Roy

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