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LONDON (ICIS) — The worldwide fuel market continues to concentrate on the newly-agreed European cap on pure fuel costs. The regulatory strikes from the European Union fuelled the volatility on the European market, main the TTF to rise on the information earlier than falling consecutively session after session. The delicate temperatures for the time of yr in Europe and robust LNG flows additionally added to the bearish sentiment.
The decline on the TTF led to a downward correction on Asia’s spot LNG costs regardless of the market beforehand holding regular regardless of muted demand. However necessities for January and February deliveries to Asia paint a cooler winter image.
Focus additionally remained on expectations of below-freezing temperatures over the subsequent few days which may disrupt delivery round Cheniere’s Sabine Cross plant in Louisiana.
Europe’s worth cap
EU power ministers agreed on a brief fuel worth cap mechanism on 19 December. The value cap can be triggered if the front-month TTF worth exceeds €180/MWh for 3 consecutive working days, and is greater than €35/MWh above a reference LNG worth over the identical interval.
LNG merchants mentioned that the €35.00/MWh unfold between LNG and fuel costs, ought to assist Europe to draw sufficient LNG whereas tempering excessive worth spikes.
However deep doubts remained as a result of problem in pinning down a European LNG worth, and with the cap making use of to trade commerce which means OTC exercise was not included.
European terminals progress
Germany’s Wilhelmshaven LNG terminal despatched first fuel into the Open Grid fuel community on 21 December, knowledge from ENTSOG confirmed.
On the transparency web site of power trade EEX, operator Uniper mentioned it expects to start working commercially from mid-January 2023.
In France, TotalEnergies LNG Providers France (TELSF), a subsidiary of TotalEnergies, will start providing 50% of the 5 billion cubic metres (bcm) capability at its deliberate FSRU on the French port of Le Havre in January forward of its begin of operations in September 2023. TotalEnergies will contract the remaining 50% over the five-year interval.
Gasgrid Finland has confirmed the FSRU Exemplar will arrive in Finland between 25-28 December.
The demand profile from Asian consumers remains to be deemed as nicely inside seasonal regular, and temperature-related home demand from key consumers stays according to earlier forecasts.
Nonetheless, with peak winter nonetheless probably forward, a Japanese buying and selling home was heard to be making enquiries for a February cargo to Japan. The requirement emerged along with two from Japanese utilities reported on 20 December. It’s not clear if the requirement from the buying and selling home is linked to both of the necessities from the utilities.
On the availability aspect, Oman LNG is providing a cargo on a bilateral foundation for loading between 26-28 January, 2023. The cargo is being mentioned on each an FOB and a delivered foundation.
Kuwait’s KUFPEC is providing a cargo from Australia’s Wheatstone LNG undertaking for loading between 16 and 21 February 2023. The tender closes on 22 December.
Given the timeline of the cargo, it’s anticipated to attract a lot consideration from merchants, with the award worth doubtlessly larger than prevailing netbacks.
Thailand’s PTT is alleged to have awarded a minimum of three cargoes in a purchase tender that closed on 20 December for supply in January and February. Vitol and Petrochina have been named as potential winners.
Manufacturing has been briefly suspended at Australia’s Prelude LNG plant attributable to a hearth on 21 December.
Earlier that day the 170,000cbm Methane Becki Anne loaded the primary cargo from Prelude because the earlier outage. Nonetheless, draught knowledge prompt that it was solely a half-cargo.