(Montel) The profitability of selling US LNG to Europe versus Asia has doubled over the past week as curbed Russian flows and a protracted outage at US LNG terminal Freeport drove up regional prices, said Spark Commodities.
The netback, or profitability, of a US cargo from Sabine Pass – including cost, insurance and freight to Europe – was last assessed late on Thursday at USD 33.77/MMbtu for August, which was USD 1.17 higher than the equivalent for delivery in Asia, according to the latest data from the intelligence firm. That compares to the USD 0.47 netback spread a week ago.
The improved attractiveness of the EU market for exporters was mostly driven by sharper price gains this week for European gas, due to Russian supply curtailments through the key Nord Stream 1 pipeline to Germany, to just 40% of capacity, an industry source said.
The premium for European delivery over Asia also widened along the curve, with September last assessed USD 1.92 higher to its Asian equivalent, compared to USD 0.86 the week before and October jumping 10-fold week on week to USD 2.65, according to the data.
Falling costs
Falling freight costs, particularly those from the US-Europe following the Freeport outage – which eased the tightness in vessel availability – also contributed to the spread widening along the curve, the source said.
The plant will be shut down for repairs for at least 90 days until the middle of September, before ramping up gradually and returning to full capacity by the end of the year.
Regarding freight prices, the Atlantic LNG roundtrip (US-Europe), known as Spark 30, for the third quarter tumbled 20% week on week to USD 72,583/day, while for the fourth quarter it increased 3% to USD 156,750/day.
Europe has been scrambling to replace Russian gas – in light of the latter’s war in Ukraine – but this has pitted it directly with Asia in terms of available LNG supply.
The improved attractiveness of the EU market for exporters was mostly driven by sharper price gains this week for European gas, due to Russian supply curtailments through the key Nord Stream 1 pipeline to Germany, to just 40% of capacity, an industry source said.
The premium for European delivery over Asia also widened along the curve, with September last assessed USD 1.92 higher to its Asian equivalent, compared to USD 0.86 the week before and October jumping 10-fold week on week to USD 2.65, according to the data.
Falling costs
Falling freight costs, particularly those from the US-Europe following the Freeport outage – which eased the tightness in vessel availability – also contributed to the spread widening along the curve, the source said.
The plant will be shut down for repairs for at least 90 days until the middle of September, before ramping up gradually and returning to full capacity by the end of the year.
Regarding freight prices, the Atlantic LNG roundtrip (US-Europe), known as Spark 30, for the third quarter tumbled 20% week on week to USD 72,583/day, while for the fourth quarter it increased 3% to USD 156,750/day.
Europe has been scrambling to replace Russian gas – in light of the latter’s war in Ukraine – but this has pitted it directly with Asia in terms of available LNG supply.
