Asia buys up LNG, leaves Europe without gas reserves
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Liquefied natural gas is actively shifting to Asian markets.

   Summer heat and the need to operate air conditioners in the region had led to a sharp rise in demand for resources. Asian markets, bringing in free volumes of LNG from all over the world, still record a significant premium in prices compared to other hubs. While in July, the Platts JKM index (Japan Korean Marker – reflecting costs on the spot  market of shipments delivered to Japan, South Korea, China and Taiwan) exceeded $450 per 1000 cubic metres, futures for September on the JKM index are already trading at higher than $500 per 1,000 cu. m.

   As a result, shortages of LNG have developed in Europe and could cause a serious decline in the level of stocks at receiving terminals, according to data from the portal Gas Infrastructure Europe.

   The portal reported that consumers of regasified LNG are increasingly receiving their supply from reserves at port reservoirs (and quite limited supply at that) rather than from new shipments.

   Over the past week (18th to 24th July), the level of reserves at LNG terminal reservoirs in the European Union declined by 19 % – to 3.16 million cu. m. compared to the first week of July. The drop was most pronounced in countries where the share of LNG in the energy balance was the greatest- Spain and Portugal, as well as in Poland and Italy.

   The flow of regasified natural gas from European terminals to gas transport systems in July 2021 has decreased by 22 % compared to July 2020 and by 30 % compared to 2019, prior to the Covid crisis. There was also a noticeable dip of 12 % compared to levels in the previous month, June 2021.

   The process of replenishing stocks in underground storage areas and the completion of planned repair work on the Russian Nord Stream and Yamal-Europe gas pipelines are now proceeding more quickly. Based on daily gas data from 23rd June, daily shipments are now at the index’s average volumes over the past five years.

   However, the current level of gas stocks  in European storage areas (54.28 % of daily gas levels at 24th July) is at the 16.48 percentile mark lower than the average indicator over the past five years.

  At the TTF hub in the Netherlands, on Monday 26th July gas closed at 433 dollars per 1,000 cu.m. Over the past two weeks, gas traded steadily, trading within a corridor of  $410-440


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July 2021