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