LNG Bunker Snapshot: Winter fears push Rotterdam prices higher

Rotterdam's LNG bunker price has increased amid concerns over colder weather and supply disruptions in Europe, while Singapore's price has risen due to sustained gas-for-power demand driven by high temperatures in East Asia.

PHOTO: A bunker vessel delivering LNG to a semi-submersible crane vessel in Rotterdam. Titan

Changes in weekly LNG bunker prices:

• Rotterdam up by $35/mt to $755/mt
• Singapore up by $13/mt to $817/mt

Rotterdam

Rotterdam's LNG bunker price has climbed by $35/mt in the past week, reaching $755/mt.

Colder-than-normal temperatures are forecast in parts of Europe through early October, which is expected to boost gas demand for heating purposes. At the same time, supply concerns persist, with Norway, Europe’s largest supplier, facing multiple unplanned outages, compounding the effects of ongoing seasonal maintenance at gas facilities, ING’s Warren Patterson said.

Europe is also grappling with uncertainty surrounding Russian gas flows via Ukraine. Recent developments in the Kursk region, where Russian military forces have advanced to within 10 kilometres of the Sudzha gas compressor station, have heightened concerns about potential damage and further supply disruptions, Rystad Energy said.

The Sudzha gas compressor station serves as a crucial transit hub for Russian gas into Europe. Ukrainian forces have been attempting to penetrate the Kursk region.

Scheduled maintenance at the Medgaz pipeline has reduced gas flows from Algeria to Spain, further adding to the pressure on the gas supply. As a result, the continent is facing a shortfall of 66 million cbm/day due to these disruptions, Rystad Energy said.

Singapore

Singapore's LNG bunker price has risen by $13/mt to $817/mt. This increase has been driven by a higher NYMEX Japan/Korea Marker (JKM) price.

Several countries in East Asia continue to grapple with higher-than-normal temperatures, with the Japan Meteorological Agency forecasting a more than 70% chance of above-average temperatures across Japan from 28 September to 4 October.

Similarly, the Korea Meteorological Administration reports a 60% probability of above-average temperatures from 30 September to 6 October. This has kept gas-for-power demand elevated in East Asia.

Although there has been limited spot cargo buying in the region, demand for air conditioning is expected to continue depleting gas inventories. Japanese importers may return to the spot market soon, with rumours that Japan's largest power company, Jera, has already secured spot deliveries for the upcoming winter months, Rystad Energi said.

By Debarati Bhattacharjee

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