Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC

Asia prices inch up ahead of possible EU ban on Russian oil

(Reuters) - Asian spot LNG prices inched up this week as market players fear prices might skyrocket if the European Union imposes a ban on Russian oil and Moscow reacts by halting gas supplies to the continent.

New Fortress Energy LNG

The average LNG price for June delivery into north-east Asia was estimated at $23.90 per MMBtu, up $0.40 from the previous week, industry sources said.

European gas prices have risen recently amid ongoing concerns over possible cuts to supply from Russia, which provides around 40% of the bloc’s gas.

The European Commission will discuss on Friday a tweaked proposal to embargo Russian oil. The proposal would include a three-month transition before the introduction of a ban on shipping services to transport Russian oil, instead of the initial one month.

Russian President Vladimir Putin put the West on notice on Tuesday after he signed a broad decree which forbade the export of products and raw materials to people and entities on a sanctions list that he instructed the government to draw up within 10 days.

"The proposed EU ban for Russian oil is increasing market tensions about possible future gas supply disruptions either triggered by a Russian counter move, or a EU ban on natural gas later in the year," said Hans van Cleef, senior energy economist at ABN Amro.

A stable flow of LNG into Europe and restoring European gas storage have helped ease some concerns, according to Jamie Maddock, equity research analyst at Quilter Cheviot.

"European gas prices have thankfully stopped their upward climb but it’s taken a lot. However, with the EU coming close to reaching a deal on Russian oil import sanctions, there is a high potential for a reversal of the willingness to meet Russia’s Rouble payment demands leaving the market and prices precariously balanced," he said.

Rystad Energy said in a recent report that European LNG imports hit a five-year monthly high in April as supply tightness in the continent, with France, Spain and the UK topping the importers list.

However, most European countries will struggle to replace a sudden drop in supply if it happens. 

LNG inflow in UK and Spain are creating supply bottlenecks as the infrastructure is not connected to the rest of Europe, according to Van Cleef.

Spark commodities said that forward curves continue to point to U.S. cargos being sent to Europe rather than Asia for the next 12 months.

In Asia, there is some buying interest from south Asian markets amid softer spot prices, while demand for spot cargoes is expected to remain muted in China as ongoing Covid-19 related lockdown measures have now been extended to the capital Beijing, Refinitive analysts said.

(Reporting by Marwa Rashad; Editing by Nina Chestney)

Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo


Editorial Comment
-Lee Nichols
The gas processing/LNG sector is investing in new technologies to mitigate carbon emissions from both operations and its supply chain.
Industry Focus: Maximizing the performance of your ETRM system
-Teresa Kroh, Brad York
Energy trading and risk management (ETRM) systems are vital for the support of business processes associated with trading energy commodities such as crude oil, refined products, natural gas, natural gas liquids (NGLs) and electric power, as well as facilitating the movement and delivery of those energy commodities and associated risk management activities.
-Oz Rodriguez, Catriona Penman
More than 100 participating countries at the 26th UN Climate Change Conference of the Parties (COP26) signed the Global Methane Pledge, in which they agreed to take action to reduce methane emissions at least 30% by 2030 vs. 2020 levels.

Optimizing Gas Distribution: Accounting for Changeovers, Regulators, and More

Register Now

Gas distribution systems are critical to the effective operation of many industrial facilities around the world. Despite the importance of these systems, however, opportunities to improve their performance and cost-effectiveness are often missed or misunderstood. Increasing changeover pressure may seem like a good way to improve system flow, for example, but it often does so at the expense of bottled gas. Adding regulators may help you control supply pressure, but it also adds cost to your system. So, how do you know what the ideal gas distribution setup is for you?

Attend this webinar to:

  • Gain a basic understanding of the fluid dynamics that affect pressure control in gas distribution systems, learning to interpret flow curves and recognize phenomena like lockup, droop, and supply pressure effect (SPE)
  • Learn how inlet pressure affects regulator performance and when to specify certain regulator types and configurations to effectively control gas system pressures

Understand the inherent trade-offs between gas utilization and flow capacity and how to select both the right changeover pressure and automatic changeover panel design for your operations.

May 4, 2021 10:00 AM CDT

Register Now


Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2022 Gulf Publishing Holdings LLC.