Asian LNG prices stable on Japanese demand
Monday, 28 March 2022
LONDON, Mar 27 (Reuters): Asian spot liquefied natural gas (LNG) prices were stable last week on solid demand from Japanese utilities but amid renewed uncertainty over Russian supply after Moscow's demanded that some countries should pay for gas purchases in roubles.
The market is also trying to comprehend the long-term impact on LNG markets after the United States said it will work to supply 15 billion cubic metres of LNG to the European Union this year to help it wean off Russian energy supplies.
The average LNG price for May delivery into north-east Asia LNG-AS was estimated at $35.00 per metric million British thermal units (mmBtu), down $0.50 from the previous week, industry sources said.
In Asia, Japanese utilities tapped the spot market after an earthquake urged higher demand for LNG to replenish stocks.
President Vladimir Putin said on Wednesday that Russia will seek payment in roubles for gas sold to "unfriendly" countries, raising the risk of a supply squeeze and even higher prices. It remains unclear whether Russia has the power to unilaterally change existing contracts agreed upon in euros.
"Russia's demand to be paid in roubles for its gas supplies re-injected some uncertainty and volatility into the market in recent days, which could continue into next week. However, at present it doesn't look like either Europe or Russian want the flows of pipeline gas to physically stop," said Alex Froley, gas and LNG analyst at data intelligence firm ICIS.
Senior US administration officials did not specify what amount or percentage of the extra LNG supply would come from the United States.
US LNG plants are producing at full capacity and analysts say most of any additional US gas sent to Europe would have to come from exports that would have gone elsewhere.
"You have to break the global gas market model a bit to take this LNG volume form somewhere else and there are not very clear signals now who is going to take responsibility," said Victor Tenev, LNG Business Consultant at ROITI Ltd.