Europe’s imports of liquefied natural gas during December clocked a 11-month high even as Asia recorded higher arrivals, according to a Reuters report.
Europe imported 10.89 million tonnes of LNG in December, compared with 8.86 million tonnes in the previous month, the news agency quoted data from Kpler.
Imports were also highest since January’s 11.18 million tonnes last year, the data showed.
Usually, imports rise in the winter months as demand for heating at offices and homes increases.
Imports also surged ahead of the end of the transit deal between Ukraine and Russia.
A deal allowing Russian gas to transit through Ukraine pipelines to Europe came to an end on December 31.
Ukraine did not renew the deal as the country is in a war against Russia since early 2022.
However, the surge in imports by Europe did not come at the expense of arrivals in Asia, Reuters said.
Asia is the world’s largest importer of LNG.
Asia arrivals higher in December
Arrivals also rose in Asia as the continent’s arrivals were clocked at 25.63 million tonnes in December, compared with 22.64 million tonnes in the previous month.
According to Kpler data, arrivals into Asia during December were also highest since January when imports touched 26.19 million tonnes.
Asia’s imports in December were lower than the corresponding month in 2023, according to the report.
Asia’s imports were 3.6% lower from the 26.58 million tonnes shipped in the same month in 2023.
Likewise, Europe’s December imports were also lower than the 11.75 million tonnes imported during the corresponding month in 2023, according to the report.
Warmer-than-expected temperatures in Asia and higher spot prices weighed on imports of LNG during December.
China imported 7.66 million tonnes of LNG last month, which was lower than 8.20 million tonnes for the same month in 2023.
The Asian giant is the world’s top importer of the fuel.
Source: Reuters
Similar declines were recorded in Japan and South Korea, according to the report.
Meanwhile, in India, Asia’s fourth largest buyer of LNG, imports increased slightly to 1.94 million tonnes last month from 1.86 million tonnes recorded in December 2023.
However, rising cargo prices have curtailed India’s imports of LNG over the past six months.
India’s imports peaked in June when arrivals were at 2.60 million tonnes.
LNG prices
Spot prices for LNG delivery to Asia was at $8.30 per million British thermal units (mmBtu) in early March, the lowest level of 2024, Reuters said.
Indian buyers would have booked spot cargoes at these prices, which were delivered until June.
Hence, the rise in imports in June.
However, prices rose from March onwards, hitting $12.60 per mmBtu by the middle of June.
Subsequently, prices traded at $14.10 in August and peaked at $15.10 by the end of November, according to the report.
Prices have since declined somewhat to around $14.60 per mmBtu in the week ended January 3.
A price level above $10 per mmBtu has discouraged India to purchase more spot cargoes.
Demand in Europe
Natural gas prices across Europe are likely to remain higher as forecasts of a colder winter boost demand.
Storages of natural gas in Europe have also dropped to just over 70% as of last week compared with 85% from the same period last year.
It is also below the five-year average of 76%.
The end of the Russia-Ukraine transit deal would mean that there would be further declines in storages in Europe.
It is also likely to continue higher purchases of LNG in the coming months.
According to Reuters, Europe also the option of purchasing LNG from the US, which could be sufficient enough to meet domestic demand.
Imports from the US hit an 11-month high of 5.22 million tonnes in December, was significantly higher than 2.30 million tonnes from July, which was the lowest level last year.
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