Singapore — Asian spot LNG prices have risen to unprecedented levels due to February cargo shortages, transportation bottlenecks, supply outages and record winter temperatures boosting…
Jan 13, 2021
Futures signal JKM prices could ease for March delivery but a looming cold snap in the Northern Hemisphere in the US and Europe present significant upside risk for global gas markets.
** The S&P Global Platts JKM for February was assessed at a record high of $32.494/MMBtu on Jan. 12. This is the highest for the LNG benchmark for Asian spot LNG since it was launched in early 2009.
** On Jan. 11, JKM rose by $6.768/MMBtu, or 31% from the previous day, the most it has ever risen in a single day, on the back of competitive bids for February cargoes reported during the Platts Market on Close assessment process.
** Spot prices are much higher than oil-linked term LNG prices that are at around $8-$9/MMBtu at current oil prices of $56/b. The current Brent crude price in MMBtu is around $9.7/MMBtu at a conversion rate of 5.8 MMBtu per barrel.
** In northern China, trucked LNG prices surged to around $28/MMBtu around Beijing, Tianjin and Hebei, nearly doubling in a single week due to a third cold snap and local supply disruptions.
** Low spot availability, Panama Canal restrictions and ice conditions in North Asian ports have contributed to LNG shipping rates hitting a multi-year high with prices hitting $300,000/day in January. In the week of Jan. 11, the Atlantic day rate was at $250,000/day and Asia Pacific day rate was at $175,000/day.
** In Japan, day-ahead power prices breached Yen 220/kWh, or $618/MMBtu on Jan. 12, Japan Electric Power Exchange data showed. This compares to around Yen 100/kWh a week earlier and single digit price levels in December, indicating a surge of more than 40 times.
** The spread between the FOB Singapore marine fuel 0.5% assessment and the FOB Singapore 380 CST high sulfur fuel oil assessment hit a 10-month high Jan. 12 at $101.36/mt, on the back of climbing demand for low sulfur fuel oil as LNG prices hit historic highs.
** China’s northern provinces faced multiple cold waves since December causing energy shortages and forcing utilities to deploy all energy sources available. In the first week of January, Beijing recorded the coldest temperature since 1966 and other provinces hit their lowest mercury level on record.
** On Jan. 8, China’s State Council said in a meeting chaired by Premier Li Keqiang that efforts were being redoubled to shore up coal, electricity and natural gas supplies for residential heating in winter, Xinhua reported.
** Japanese utilities facing gas shortages have cut back on surplus electricity sales on its power exchange, and resorted to burning more coal and fuel oil, in addition to procuring more spot LNG at high prices. Solar power has been severely hit due to winter storms.
** Japan last week announced a month-long state of emergency in Tokyo and three adjacent prefectures, boosting residential energy demand. This is expected to expand to more prefectures, covering over 55% of the entire population.
** Japan’s power demand rose by 13% year on year for the first week of 2021, averaging 108 GW, with the 3.5% increase in December also supported by cold weather, S&P Global Platts Analytics said. Some regions saw a 20% increase and the cold has been amplified by the need to keep windows open for circulation amid COVID-19 spread.
** South Korea’s electricity demand jumped to a wintertime high and state-run Korea Power Exchange, or KPX, has been on high alert. Temperatures in Seoul dropped to minus 18.6 degree Celsius in early January, the lowest in 35 years , according to Korea Meteorological Administration.
Analysis: Slim pickings for prompt LNG cargoes to meet historic Feb Asia demand
Video: Energy prices spike in N Asia; new coronavirus outbreaks weigh on transportation fuels
News: Ice conditions at northern Chinese ports increase shipping risks
** Panama Canal passage wait times for Asia-bound LNG tankers from the US Gulf Coast without reservations were as much as 13 days at the end of 2020.
** P&I Clubs have warned of worsening ice conditions at China’s northern ports such as Yingkou, Jinzhou, Huludao, Dandong, Qinhuangdao, Tangshan, Weifang and Dongying that could disrupt vessel arrivals and cargo discharge.
** Shell has resumed loading of LNG cargoes from its Australian Prelude FLNG project after it was suspended in early 2020, allowing it to benefit from record high LNG prices. Meanwhile, Chevron’s Gorgon LNG has found weld issues at its Train one, which is likely to extend overall maintenance further.
** Pakistan’s national grid suffered a major outage on Jan. 9, after a technical fault that tripped the power transmission system and led to the shutdown of power plants.
** Pakistan LNG received some of the highest price offers on record for its recent tenders; its February tender saw traders offer cargoes at as much as 32.5% Brent slope.
** Malaysia’s Bintulu LNG export facility has faced production problems at several trains and Indonesian LNG exports are in a structural decline due to upstream gas production issues.
Jan 18, 2021
Ira Joseph, head of gas and power for S&P Global Platts Analytics, and Ryan Ouwerkerk, manager of Americas natural gas pricing for S&P Global Platts, are back with their first podcast of 2021 to discuss the remarkable price and market movements that have ushered in 2021, stretching from the historic drivers of JKM to $20/MMBtu to the trickle-down impact the surge has had on European and US markets.
Dec 15, 2020
LNG trade in 2020 has remained fairly resilient compared with other energy commodities, with single-digit year-on-year growth expected despite the impact of COVID-19 in the spring. Since May, when the JKM spot price bottomed out below $2/MMBtu due to oversupply, the market has enjoyed a sustained rally, the JKM increasing more than six-fold.
This has been down to an unprecedented supply-side response, with US LNG cancellations starting to rebalance the market through the summer, followed by strong winter buying demand from Asian buyers in the fall and a number of supply-side issues boosting prices.
Today we are examining the outlook for new North American liquefaction projects to be sanctioned in 2021 amid a virtual standstill in 2020. The recent…
Jan 11, 2021
Today we are examining the outlook for new North American liquefaction projects to be sanctioned in 2021 amid a virtual standstill in 2020.
The recent runup in the Platts JKM has buoyed developers, but challenges remain.
S&P Global Platts natural gas writer Harry Weber spoke with Charif Souki, co-founder and executive chairman of Tellurian, which is proposing to build an export facility in Louisiana. Souki also co-founded Cheniere Energy, the biggest LNG exporter in the US.
LNG is rewriting trade flows, challenging the established energy mix and changing commodity dynamics. The interplay between buyers and sellers creates challenges as well as…
Nov 10, 2020
LNG is rewriting trade flows, challenging the established energy mix and changing commodity dynamics. The interplay between buyers and sellers creates challenges as well as opportunities, which means it’s never been more important to understand the entire value chain. S&P Global Platts provides you with transparent LNG pricing – including Platts JKM™ our daily benchmark – and robust market information giving you crucial perspectives on price formation, essential data, and insightful analysis to power your decision-making.
After a year of disruption and uncertainty, this edition of Insight looks at emerging themes in energy, from sustainable aviation fuels to China’s net zero…
Dec 15, 2020
After a year of disruption and uncertainty, this edition of Insight looks at emerging themes in energy, from sustainable aviation fuels to China’s net zero aspirations and the impact of the US election.
Transforming the future of LNG together. The S&P Global Platts 20th Annual LNG Conference is the meeting place for energy professionals to tackle crucial issues…
Mar 25, 2021
The S&P Global Platts 20th Annual LNG Conference is the meeting place for energy professionals to tackle crucial issues impacting the markets. We are gathering the industry to discuss navigation the global pandemic and the associated risks, the ongoing transition of the global energy economy, policy implications of the 2020 U.S. election and more.
This is a must-attend event for LNG producers, buyers, traders, shippers, investors and financiers looking to stay competitive and transform the future of LNG. While the event will be taking place virtually, we’ll have the high-caliber content and speakers the industry has come to expect. The 5-hour program packs in content-rich panel discussions, breakout sessions, interactive real-time Q&A, networking opportunities, and more.
We’ll also be adding a networking tool so registrants can interact and share before, during and after the event.
Topics of discussion will include:
– What is the short and long-term global outlook for LNG –emerging markets, demand forecasts, infrastructure, policy, pricing and trade?
– What role will LNG play in the era of renewables? A transition fuel or trusted partner through 2030? 2050?
– How can we reduce LNG’s carbon foot print to become more sustainable?
– What are some disruptive strategies and technologies we can leverage to transform LNG?
The highlights on S&P Global Platts Market Movers Asia, with senior analyst Crystal Hao: – Factors keeping LNG prices high persist – Asia refiners hopeful…
Jan 18, 2021
The highlights on S&P Global Platts Market Movers Asia, with senior analyst Crystal Hao:
– Factors keeping LNG prices high persist
– Asia refiners hopeful for easing of US-Iran tensions with Biden at the helm
– Metals market to take cue from China GDP data
– Chinese power utilities restock ahead of Lunar New Year holidays
As the world economy begins to recover from the pandemic, Mexico is considering the construction of an LNG export terminal in the port of Salina…
Jan 07, 2021
As the world economy begins to recover from the pandemic, Mexico is considering the construction of an LNG export terminal in the port of Salina Cruz to use excess natural gas in the country.
Douglas Shanda, CEO of private developer Mexico Pacific Limited, which has a similar project, spoke to S&P Global Platts about the country’s potential as an export hub.
From LNG in Asia to scrap metal in Turkey and Brent crude, commodity prices assessed by S&P Global Platts have surged to new highs. The…
Jan 18, 2021
From LNG in Asia to scrap metal in Turkey and Brent crude, commodity prices assessed by S&P Global Platts have surged to new highs.
The rally has triggered speculation of a new supercycle in commodities driven by stimulus spending and a weaker US dollar. “A key factor is growth being observed in the East led by China where we see demand above 2020 levels,” said Chris Midgley, head of Platts Analytics.
London — Shell and LNG transportation company Q-LNG said the first offshore LNG bunker tug and barge in the US was ready for operations. The…
Jan 14, 2021
The vessel, the Q-LNG 4000, will provide ship-to-ship transfers for LNG-fueled vessels as well as small-scale ship-to-shore transfers, Shell said.
“We believe LNG can play a vital role in reducing emissions from shipping today, so I am proud that we have developed the world’s largest LNG fueling network of ports and bunker vessels on key trading routes,” said Grahaeme Henderson, Global Head of Shell Shipping & Maritime.
Shell already has six LNG bunker vessels in operation globally.
The vessel, which will service customers along the southeast coast and support growing cruise-line demand for LNG as a marine fuel, has a fuel capacity of 4,000 cu m.