LNG Bunker Snapshot: Singapore’s LNG price slips to discount to Rotterdam

Rotterdam’s LNG bunker price has surged due to upcoming maintenance work in Norway, while Singapore’s price has dropped on weak Chinese demand.

Weekly changes in LNG bunker prices:

• Rotterdam up by $21/mt to $713/mt
• Singapore down by $21/mt at $700/mt

Rotterdam

Rotterdam’s LNG bunker price has risen after two consecutive weeks of declines, driven by a roughly 2% increase in the front-month Dutch TTF Natural Gas contract, a key benchmark for European gas prices.

The price rise was “due to reduced supply, including reduced gas shipments from the UK to continental Europe, reduced LNG regasification in Europe, and summer maintenance on the Norwegian continental shelf,” according to the Japan Organization for Metals and Energy Security (JOGMEC).

LNG prices are rallying “higher as attention increasingly turns to upcoming maintenance work in Norway, which will lead to lower Norwegian flows to Europe,” said two ING Bank analysts.

“Upcoming field work in Norway, Europe's top gas supplier, is raising some concerns of tightness in the market,” remarked Daniel Hynes, senior commodity strategist at ANZ Bank.

The LNG market “is striving to fill up storages ahead of the upcoming winter, and even though storage levels have increased significantly the last few months, they are still well below the same time last year,” said Mind Energy, formerly Energi Danmark.

EU underground gas storage levels reached 75.3% on 22 August, up from 73.3% the previous week, but still 17.1% lower than the same time last year, based on data from Gas Infrastructure Europe.

Singapore

Singapore's LNG bunker price fell by $21/mt over the past week, reflecting “ample supply and weak demand in Asia,” according to JOGMEC.

“China’s weaker-than-expected demand” has added to the downward pressure, said Hendrian Sukardi, LNG market analyst at China-based ENN Energy.

The decline has been driven by several factors. Trump’s tariffs have sharply impacted China’s export sector, reducing industrial gas consumption. At the same time, weak profits in real estate and exports have pushed many industries back to coal, supported by looser local environmental enforcement. Additional inflows from Russia’s Power of Siberia 1 pipeline, together with higher domestic gas output, have further displaced LNG, Sukardi noted.

“China, the world’s biggest LNG buyer last year, has already seen imports plunge 19% over the first seven months of the year … as industrial demand remained weak and traders rerouted cargoes to markets willing to pay higher prices,” commented Stephen Stapczynski, Energy Asia team leader at Bloomberg News.

As of 20 August, LNG inventories for power generation in Japan rose to 2.01 million mt, an increase of 50,000 mt from the previous week, according to the Ministry of Economy, Trade and Industry (METI).

Asian LNG bunker prices typically track the NYMEX Japan/Korea Marker (JKM), which dropped by $0.34/MMBtu over the past week, bringing the front-month contract to $11.55/MMBtu, equivalent to $601/mt.

Meanwhile, Singapore’s $29/mt premium over Rotterdam a week ago has now reversed, turning into a $13/mt discount.

In Singapore, LNG bunker sales fell in July after four straight months of growth, totalling 42,000 mt. Daily volumes averaged 1,300 mt/day, compared with 1,800 mt/day in June.

Other LNG bunker news

Northern Lights has launched the third and fourth vessels in its series of four LNG dual-fuel CO2 carriers being built at Chinese shipyards. CMA CGM has acquired a minority stake in Vanguard Renewables, securing long-term access to biomethane from up to four of the company’s renewable gas projects.

Meanwhile, QatarEnergy has taken delivery of a dual-fuel LNG carrier newbuild from South Korea’s HD Hyundai Heavy Industries (HHI).

Also, Singapore-based LNG bunker supplier FueLNG has completed its 500th ship-to-ship LNG bunkering operation, with the bunker barge FueLNG Bellina delivering an undisclosed volume of LNG to the Amphitrite Highway, a pure car and truck carrier (PCTC) owned by Japan’s Kawasaki Kisen Kaisha (K LINE).

By Tuhin Roy

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