FT: LNG tankers change course from Asia to Europe amid skyrocketing gas prices

Liquefied natural gas (LNG) tankers heading to Asia are heading halfway towards Europe, where customers are willing to pay more due to abnormally high gas prices. The Financial Times writes about this, citing industry sources.

During the year, China, Japan and South Korea outpaced Europe in LNG purchases, but now storage facilities in Asia are full and ship owners are deploying them in order to capitalize on rising prices in the European market, the newspaper notes.

The gap between European and Asian gas prices is now at an all-time high, Platts global director Ciaran Rowe told the newspaper. “The European gas market is now out of control,” he said. Spot LNG deliveries to Europe were estimated at about $ 48.5 per million Btu, according to Platts, versus $ 41 in the Asia region.

LNG is exported to Asia mainly from the United States, but supplies from other continents have also begun to be redirected to Europe. In addition to the turn towards European ports of American LNG vessels bound for Asia, the first shipment of Australian LNG in more than 10 years will be shipped to Europe on December 24, said Alex Frawley, an analyst at ICIS, a research consulting company that tracks the movement of LNG tankers.

Torbjörn Tornqvist, chief executive of the world’s largest independent LNG trader Gunvor, estimates that 15 to 20 vessels in excess of the usual number will go to European ports in December. The same amount is expected in January.

The price rally in the European gas market began this year, especially in autumn and winter. The day before, on December 21, spot gas prices for the first time exceeded $ 2,000 per thousand cubic meters, and later set a new record of $ 2,200 per thousand cubic meters. Among the factors contributing to the volatility of gas prices in Europe, analysts note record low reserves in underground gas storage facilities and high demand for LNG in Asia.

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