LNG Bunker Snapshot: Rotterdam’s price declines on milder weather

Rotterdam’s LNG bunker price has fallen with Europe’s mild weather and softer gas demand, while Singapore’s price has dipped amid weak overall demand in the East Asian LNG market.

Weekly changes in LNG bunker prices:

• Rotterdam down by $15/mt to $615/mt
• Singapore down by $7/mt at $663/mt

Rotterdam

Rotterdam’s LNG bunker price has fallen for a third week in a row, driven by a 4% drop in the front-month Dutch TTF Natural Gas contract, a key benchmark for European gas prices.

The TTF price has declined amid “milder-than-average temperatures in Northwest and Southern Europe” and “a significant expected increase in Germany’s wind power generation,” according to the Japan Organization for Metals and Energy Security (JOGMEC).

“European gas futures fell amid signs of weaker demand. Milder and windier weather are forecast for next week, dampening the need for gas for power and heating. Warmer conditions are also set to linger across the continent through mid-December,” commented Daniel Hynes, senior commodity strategist at ANZ Bank.

“Milder-than-usual weather for this time of year will weigh on prices,” said two analysts from ING Bank.

“Milder winter weather, together with improving wind speeds added further short-term downward pressure on prices,” echoed Greg Molnár, gas analyst at the International Energy Agency (IEA).

The EU's underground gas storage level stood at 72.8% on 5 December, down from 75.9% the previous week and 12.8% lower than a year earlier, according to Gas Infrastructure Europe.

“European gas prices have fallen steadily in the past week amid ongoing Russia-Ukraine peace talks and rising LNG cargoes out of the US,” added oil and gas analysts at research firm BMI.

Singapore

Singapore’s LNG bunker price has fallen by $7/mt over the past week, driven by weak “spot LNG demand in China” due to “steady domestic production and pipeline imports,” according to JOGMEC.

“North Asia LNG was also lower, amid limited activity in the spot market. There has been some interest from Bangladesh and Taiwan, but buyers from major consumers have been largely absent,” said ANZ Bank’s Daniel Hynes.

The decline mirrors a $0.21/MMBtu ($11/mt) drop in the NYMEX Japan/Korea Marker (JKM), which brought the front-month contract to $10.88/MMBtu ($566/mt).

Singapore’s LNG bunker price premium over Rotterdam has widened from $40/mt last week to $48/mt this week.

Other LNG bunker news

Northern Lights has received the third vessel in its four-ship series of LNG-ready CO2 carriers built in China.

Swiss engine maker WinGD has introduced a new high-pressure LNG dual-fuel engine for ultra-large container ships.

Singapore’s Muar LNG plans to build an LNG storage and reloading facility in Malaysia’s Maharani Freeport Industrial Park.

Meanwhile, liquefied biomethane (LBM) supplier Axegaz and commodities trader Cargill have loaded LBM onto an Avenir bunker vessel at Klaipeda’s LNG terminal.

LNG newbuild orders continued to lead into November. The global LNG-capable fleet reached 833 operating vessels, with another 624 on order for delivery through 2033, according to DNV data.

Estonia’s Tallink will run one of its vessels on LBM and sell compliance surpluses generated in Gasum’s FuelEU Maritime pooling scheme.

Singapore-based Eastern Pacific Shipping has ordered two LNG dual-fuel crude tankers from Hengli Shipbuilding in China.

By Tuhin Roy

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