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Russia's Gazprom says global LNG glut pressures global gas prices

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(Image courtesy of Gazprom)

MOSCOW/LONDON (Reuters) - Excessive supplies of liquefied natural gas (LNG) as well as brimming storage have put pressure on natural gas prices in Europe and Asia, dimming forecasts for exports, Russian gas giant Gazprom said.

Demand for energy has been dampened by warm winter weather in Europe as well an outbreak of a new coronavirus in China, which further pressured Asian LNG spot prices LNG-AS to a record low below $3 per million British thermal units (mmBtu) last week.

Elena Burmistrova, head of Gazprom’s exports unit, told a meeting of investors in London that times were hard for all gas suppliers.

“I spoke to our LNG traders this morning, they confirmed the volumes which are “on the water”, and those are unsold volumes, are around 20 million tonnes,” she said when asked for Gazprom’s export forecast.

An analyst with data intelligence firm Kpler told Reuters that 15 LNG tankers were flagged as “floating storage” globally, with 11 of them scattered across Asia as the coronavirus outbreak hit gas demand in China.

The virus has affected about 60,000 people globally and had a wide impact on demand for all kinds of energy

“It’s hard to imagine that all those volumes will not pressure the market,” Burmistrova said.

According to Gazprom Bank, Gazprom’s gas sales to Western Europe, a key source of revenue, fell in January by 26 percent year-on-year.

Exports to Europe last year edged down to 199 billion cubic metres (bcm) from a record-high 202 bcm in 2018, leaving its share of the European gas market at around 36%.

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