“ The big question is , when will the tide turn once again and LNG cargoes be whisked away to other regions ”
Even so , LNG producers are banking on boosting their exports , notably in the US . According to US Energy Information Administration ( EIA ) estimates , the US will likely hike LNG exports 18 % this year to 11.54bn cubic feet per day ( 327mcm / day ) on the back of capacity additions .
“ Northwest Europe really should be the market of choice for Atlantic basin LNG due to shipping times and lower risk factors in each journey ,” the analyst says , pointing to the fact there is no Panama Canal traffic to contend with , it is relatively rare to see port delays and severe weather is less likely than in the Pacific .
Refinitiv ’ s Bryan says while import volumes will likely remain strong in the near-term , the UK may not need so much LNG . “ At the moment , we ’ re looking good [ for supply ] with cargoes flying into Europe at record levels ,” he says . Yet he does not rule out a slowdown in arrivals if the rest of the UK winter sees mild temperatures or Asian prices lure shipments to that region . “ We ’ re seeing LNG prices starting to rise in Asia ,” he says . “ One reason is the weather , with potentially colder weather , and also Japan has been drawing from stocks .”
Montel Magazine 1 – 2022
However , reports emerged last month that China was reselling some LNG back onto the international market , according to Craig Lowrey , senior analyst at energy consultancy Cornwall Insight . Furthermore , he points out that the ramp-up in LNG deliveries to Europe have coincided with relatively steady pipeline flows from Norway and will likely remain strong in February . “ It seems disingenuous to say it , given prices at GBP 200p / th , but there don ’ t seem to be any concerns from a supply perspective ,” he says . At the time of writing , the front-month NBP contract was trading around GBP 188p / th ( EUR 76 / MWh ), after averaging GBP 204p / th in January , Ice data showed . But Lowrey concedes – with seasonal demand still strong and ongoing uncertainty surrounding the outlook for Russian flows to Europe – “ there are still a lot of nervous people out there .”
“ Given the politics , it looks unlikely that US deliveries will slow in February , although any change in US domestic demand or Asian pricing may impact ,” says Jason Durden , head of energy markets and risk management at consultancy Alfa Energy . “ The world is becoming more LNG dependent . It ’ s the easy carbon reduction transition , so it will have long-term implications ,” he says , noting more gas dependency during peaks would result in heightened price volatility . n 13