At this price, Asia prefers to resell gas to Europe

Asian consumers resell part of the American LNG to Europe. At current spot prices, it is more profitable for them to switch to other types of fuel — coal and petroleum products. Europe needs more gas after the transit of Russian gas through Ukraine has stopped.

At least two tankers carrying LNG from the United States changed their course and headed to Europe instead of Asia. This is evidenced by the AIS data of the courts.

So, the Grace Dahlia and Bushu Maru gas carriers left the Sabine Pass and Cameron LNG terminals at the end of December and headed from From the Gulf of Mexico to Asia. The ships sailed south along South America. However, on January 8, they changed course and went to Europe via the Atlantic Ocean.

Bushu Maru indicates that he plans to arrive in Dunkirk, France, on January 22. And Grace Dahlia indicates the Strait of Gibraltar as the next transit point, where she plans to reach on January 20.

The day before the change of course, on January 7, spot gas prices in Europe amounted to $ 515 per thousand cubic meters. At the same time, in Northeast Asia, the market value reached $504.

After stopping the transit of Russian gas through Ukraine, the cost of fuel on EU exchanges jumped to $ 540 in early January. However, then it began to decline, and on January 10 it was already trading at $ 478 — 11% cheaper.

Asian quotes were already higher than European ones. However, it is still profitable for local consumers to resell LNG to Europe, since at this price level it is more profitable to use coal and petroleum products.

"The mild start of winter in North Asia, combined with rising spot prices, has probably dampened the enthusiasm of Asian importers for LNG," Reuters reported yesterday.

"Europe needs more LNG to replace the loss of Russian pipeline gas that went through Ukraine. In this situation, Asian consumers may switch to cheaper alternatives," Bloomberg analyst Stephen Stapzynski said in X.

Despite the fact that gas prices in Europe have decreased, they continue to remain extremely high compared to pre-crisis times. For example, on German stock exchanges, the average gas price in the pre—crisis five-year period was $ 180 per thousand cubic meters - 2.6 times lower than the current price.

According to GIE, there was no sharp jump in LNG shipments to Europe in the first eight days of the new year. Average daily deliveries amounted to 312 million cubic meters. This is 18 million cubic meters per day lower than in December. However, overbought gas carriers have not yet reached the European terminals, while consumption in Europe was low.