Rotterdam’s LNG bunker price has fallen sharply due to mild weather forecasts and steady supply from Norway, while Singapore’s price has edged down slightly amid weak demand from China.

Weekly changes in LNG bunker prices:

• Rotterdam down by $43/mt to $721/mt
• Singapore down by $7/mt at $780/mt

Rotterdam

Rotterdam’s LNG bunker price has come down considerably for a second week in a row. The drop has come amid a 7% decline in the front-month Dutch TTF Natural Gas contract - a key benchmark for European gas prices.

LNG prices have weakened because of “easing of temperature forecasts, stable supplies from Norway, and a recovery in wind power generation," according to the Japan Organization for Metals and Energy Security (JOGMEC).

On 4 July, EU underground gas storage levels stood at 50%, up from 58% the previous week. This is still 24% lower compared to the same time last year, according to Gas Infrastructure Europe data.

“Germany's largest gas storage site is still only 2% full, highlighting the challenge to fill up storages,” said Greg Molnár, gas analyst at the International Energy Agency (IEA).

“Rehden is Europe’s second largest facility with a capacity of near 4 bcm [billion cbm]. It plays a key role in ensuring the gas supply security of northwest Europe. Rehden was filled up to 98% at the start of the previous heating season, and alone met 7% of Germany’s winter demand,” Molnár added.

Singapore

Singapore’s LNG bunker price has declined by a slight $7/mt over the past week, driven lower by subdued Chinese demand. As a result, Singapore's price premium over Rotterdam has widened significantly, from $23/mt to $59/mt within a week.

“Lower oil prices may limit China's spot purchases this month,” noted Stephen Stapczynski, Energy Asia team leader at Bloomberg News. “There is ample, crude-linked piped natural gas available to meet spikes in summer demand," he added.

As of 29 June, Japan’s LNG inventories for power generation stood at 2.15 million mt, down by 120,000 mt from the previous week, according to the Ministry of Economy, Trade and Industry (METI).

Other LNG bunker news

UK-based James Fisher & Sons has begun building the first of four LNG dual-fuel chemical tankers in China. South Korea’s Hanwha Ocean will construct an LNG dual-fuel research icebreaker, selected by the Ministry of Oceans and Fisheries.

Japan’s Imabari Shipbuilding has delivered an LNG dual-fuel vehicle carrier, while Spain’s Molgas completed its first bio-LNG loading at France’s Dunkerque terminal. Shell Western LNG supplied 500 mt of bio-LNG to a K Line vessel at Belgium’s Zeebrugge port.

France’s GTT and China’s Hudong-Zhonghua have teamed up to improve LNG bunker vessel designs. The Hong Kong Marine Department has launched a new incentive scheme to promote domestic alternative fuel bunkering, including for LNG.

Meanwhile, US-based Coastal Bend LNG plans to integrate carbon capture and storage into its LNG production, and to offer “low-carbon” LNG for bunkering.

By Tuhin Roy

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