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Red Sea Disruption Have Not Lifted LNG Freight Rates: Goldman


LNG freight continue to move lower despite ongoing Red Sea shipping disruptions, however, this could change due to the narrowing JKM-TTF premium, Goldman Sachs said in a note.

  • Suez Canal LNG crossing have declined 70% year on year since mid-December, Kpler data showed.
  • Mild weather in Northeast Asia has weighed on Asian LNG import needs, narrowing the JKM-TTF premium to below $0.50/mmBtu month to date, the bank said.
  • Should the premium narrow further or switch, Qatari cargoes would be further incentivized to reach Europe via the longer, costlier Cape of Good Hope route. This would increase LNG-on-the water times, potentially lending renewed support to LNG freight rates, Goldman said.
  • US LNG exports continue to be more profitable to Asia through July according to BNEF. The US LNG netback to Europe is currently $6.30/MMBtu for March, while the US LNG netback to Asia is currently $6.78/MMBtu for March.
    • JKM Feb 24 up 14.4% at 11.95$/mmbtu
    • JKM-TTF Feb 24 up 0.2$/mmbtu at 2.83$/mmbtu

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