A supply-side crunch in the European gas market has done little to curb re-exports of LNG to Asian economies, it has been reported.
Using shiptracking from its own Refinitiv Eikon as well as that from data intelligence firm Kpler, Reuters reported that Europe shipped about 0.5m metric tons of LNG to mostly South Asian economies in September, breaking a record set in February 2018.
Those shipments came as major economies look to shore up supplies for winter. Lower supplies in the European market, however, have led to a huge increase in natural gas and electricity prices.
Asian economies, meanwhile, are competing for LNG supplies in the tight market. Oswald Clint, a senior analyst at Bernstein Energy, was quoted as saying that buyers of re-exported LNG were not getting bargains, however.
“The most expensive incremental supply that can be sent eastwards is a European re-exported cargo which includes further costs for re-loading and tank rental,” he said.
“Nevertheless, the re-exports will make it tough for Europe to refill storage capacity and create headwinds for natural gas prices,” Clint added.
A Singapore-based industry source, meanwhile, has said that LNG volumes re-exported from Europe are usually carried out by companies that have regional offtake agreements.
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