LNG Supply Still a Upside Gas Price Risk for Europe

Higher LNG demand from Asia remains an upside risk for European gas markets. Strong LNG supply will need to be maintained to cover any more cold spells this winter as well to restock storage over the coming summer months. The Summer 23 contract is still trading above the March 23 price with high prices still needed to attract the LNG supplies from a tight global market.

• US LNG netbacks continue to fall as European and Asia prices decline. The spreads still suggest is it more profitable to send US LNG exports to Asia instead of Europe in March. The US netback to Europe is estimated at 13.87$/mmbtu and the US netback to Asia is 15.33$/mmbtu. The netbacks were over 20$/mmbtu at the end of last year.
• Netbacks to Europe and Asia for the coming summer period are near parity although slightly favour flows to Europe.
• Total EU LNG sendout declined to 395mcm/d on 29 Jan as demand has eased on the warmed weather in NW Europe.
  • TTF MAR 23 up 3.2% at 56.9€/MWh
  • TTF SUM 23 up 3.1% at 58.78€/MWh
  • TTF WIN 23 up 2.6% at 67.48€/MWh
  • NBP MAR 23 up 4.7% at 145.99p/th
  • JKM Feb 23 down -0.1% at 19.49$/mmbtu
  • JKM-TTF Feb 23 down -0.7$/mmbtu at 1.32$/mmbtu