LNG Shipments Divert from Asia to Europe Amid Higher Gas Prices

LNG Shipments Divert from Asia to Europe Amid Higher Gas Prices

November 18, 2024 Catherine Williams - Chief Editor World

LONDON, Nov 18 (Reuters) – At least five cargo ships carrying liquefied natural gas (LNG) have changed their routes from Asia to Europe recently. This shift occurs as gas prices in Europe increase after Russia’s Gazprom stopped supplies to Austria’s OMV.

On Saturday, Gazprom halted gas deliveries to OMV following a threat from OMV to take legal action for compensation related to a past agreement. This disruption pushed European gas prices up, making it more attractive for traders to send gas to Europe instead of Asia.

“Last week, the price difference between Asian and European gas markets changed, leading to LNG cargoes being redirected to Europe,” said Laura Page from Kpler, a data analytics firm.

The Dutch TTF gas hub reported prices at 46.00 euros per megawatt hour on Monday, the highest since November 23, 2023. In comparison, the Asian benchmark Japan Korea Marker (JKM) stood around $14/mmBtu.

Several tankers have altered their destinations:

  • Vivert City: Originally bound for Bangladesh from Equatorial Guinea, it is now headed to South Hook terminal in the UK.
  • Gaslog Windsor: This vessel, carrying U.S. LNG from Sabine Pass and initially heading to China, is now rerouted to Isle of Grain terminal in the UK.
  • BW Lesmes: It had cargo loaded in Nigeria headed to China but is now also directed to Isle of Grain.

Alex Froley from ICIS noted that UK terminals are less busy than many continental ones, making it easier for traders to change course.

Additionally, the Diamond Gas Crystal, originally heading to South Korea, is now bound for the Dutch Gate terminal. The Flex Vigilant tanker has diverted from China to Europe and is waiting for new orders.

Russian gas exports through Ukraine to Europe remained stable on Monday, according to Gazprom. However, Ukraine confirmed it would not extend a gas transit agreement with Russia once it expires at the end of the year.

(Reporting by Marwa Rashad; Editing by Susan Fenton)