Spreads encourage LNG to Europe

NW Europe LNG continues running near capacity as a record amount of LNG arrives into European ports.

• With European gas prices trading well above Asia, flows are expected to continue as Europe looks to LNG to replace Russia gas supply and fill storage ahead of next winter.
• US LNG netback for June to Europe is currently 22.74$/mmbtu compared to 13.59$/mmbtu to Asia according to Bloomberg data.
• The netbacks remain in favour of supply to Europe throughout the summer with Nov still 22.8$/mmbtu to Europe and 17$/mmbtu to Asia
• The weekly average LNG imports into NW and Eastern Europe stand at 284k metric tonnes compared to a 5 year average of about 125k and up from about 150k at the start of the year.
• Europe is relying on future LNG flows for security of supply. Germany have chartered 4 floating LNG terminals which would put them ahead of UK in LNG import capacity and only behind Spain in EU. The import capacity would cover about a third of Germany’s annual consumption with hope for operations to start at the end of the year.