Rotterdam's LNG bunker price has seen a significant increase in the past week, tracking a surge in TTF prices.

PHOTO: Pavilion Energy's LNG bunker vessel Brassavola delivering a stem to a Rio Tinto-chartered bulk carrier. Pavilion Energy

Changes in weekly LNG bunker prices:

• Rotterdam up by $26/mt to $616/mt
• Singapore up by $7/mt to $674/mt

Rotterdam

Rotterdam has seen a notable increase in LNG bunker price in the past week, rising by $26/mt to $616/mt. The underlying Dutch TTF Natural Gas contract rolled from the May contract to the higher-priced June contract last week, which has raised the TTF benchmark slightly.

The rise in gas prices can be partly attributed to "reduced Norwegian gas flows to Europe, and a late cold spell across large parts of the continent [that led to] increased heating demand over the second half of April," according to head of commodities strategy at ING, Warren Patterson.

Gas inventories across Europe have been steady in recent weeks, with Gas Infrastructure Europe (GIE) data indicating storage levels are full at 62%.

Going forward, Northwest Europe is forecast to experience mild weather conditions over the next few weeks and Norwegian gas flows are gradually recovering post-outages, albeit with delays in restarts like the Aasta Hansteen field, an analyst at Independent Commodity Intelligence Services (ICIS) said. This could pull LNG bunker prices lower in Rotterdam in near term.

Geopolitical concerns in the Middle East and Ukraine have taken a back seat compared to earlier weeks, thereby reducing upward pressure on gas prices, said Danish energy agency Denmark Energi.

Singapore

Singapore has witnessed a modest increase in LNG bunker price, climbing by $7/mt to reach $674/mt.

This price movement is influenced by the Japan/Korea Marker (JKM) price and prevailing trends in the Asian LNG market.

The slight rise in JKM price stems from increasing spot LNG prices in Asia, which have been driven by concerns over Russian gas supply to Europe amidst geopolitical tensions.

Singapore's LNG bunker price premium over Rotterdam's LNG has narrowed by $19/mt to $58/mt in the past week.

Asian LNG imports in April were up 17% year-on-year, according to LSEG data. Strong inflows of LNG have capped JKM benchmark gains. 

"These stronger flows are expected to continue due to the lower price environment, warmer weather across large parts of southeast Asia, and new LNG importers entering the market," ING's Patterson said.

Maintenance activities at major LNG plants, like the 15 million mt/year US Freeport LNG plant, are expected to conclude soon. Improving exports from key LNG plants could put some downward pressure on both JKM and TTF prices, according to a report by consulting firm Tudor, Pickering & Holt (TPH).

By Debarati Bhattacharjee

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