Asia Expected to See Larger Share of Global LNG Flows: ICIS

Cold weather in both Europe and northeast Asia remains the key bullish winter scenario but the current Asian outlook suggests a bearish weather forecast and muted demand expectations according to ICIS.

• In China, Underground and LNG gas storage is reportedly high while tier-two buyers are limited by current price levels and energy majors indicate selling interest. However, LNG demand will likely remain strong compared to last winter’s weak base amid signs of stronger industrial activity.
• Weak LNG imports to Japan remain likely amid a recent rebound in depleted power utilities’ LNG storage volumes. Buying interest from Thailand, Philippines and Vietnam highlights the region’s demand potential.
• South Asia buyers in Bangladesh and Pakistan are more price sensitive but have now secured some spot winter supply while India’s supply is boosted by the restoration of GAIL’s supply contract with SEFE.
• The fastest growing LNG markets in the last quarter were China, south Asia, and southeast Asia with spot LNG to east Asia maintaining a premium to European gas prices in recent months and flows are still largely Asia-bound.
• The ICIS LNG supply-demand forecast is expecting Asia to absorb a larger share of global flows driven by China, southeast and south Asia amid the bearish European fundamentals and despite asymmetry toward upside European risk.

Source: ICIS