EU desperate for LNG while Asia has more than it needs
THE EU is desperate for liquefied natural gas (LNG) while Asia’s buying of LNG has left the region well stocked for the winter, with spot shipments being diverted to the EU, reports Bloomberg.
The vessels now being diverted from Asia occur after prices in Europe traded at a rare premium.
Energy prices soared in Asia earlier this year as China stockpiled everything from coal to fertilisers ahead of the winter.
In Europe however, buyers are struggling to replenish inventories amid uncertainty over the startup of the Nord Stream 2 pipeline from Russia.
“Europe is simply bidding gas away from Asia to not run out of electricity.” said Goldman Sachs analyst Damien Courvalin.
Sellers have begun diverting cargoes away from Asia to take advantage of the spread.
Prices in Europe are so high that some Asian countries may choose to re-export the LNG they imported for their own consumption.
Said Vortexa head Felix Booth: “Continued normal weather conditions across northeast Asia will minimise the need for prompt spot purchasing, leaving the high-priced cargoes for the European market.”
Meanwhile, the EU gas benchmark in the Netherlands fell 4.1 per cent recently but is up 600 per cent this year.