LNG Cargoes Diverted from Asia to Europe Amid Rising Gas Prices and Supply Disruptions

At least five LNG cargoes have recently diverted from Asia to Europe due to higher gas prices on the continent. This shift was prompted by Russia’s Gazprom halting supplies to Austria’s OMV after a contractual dispute. The halt in supplies caused European gas prices at the Dutch TTF hub to surge, making it more profitable to send gas to Europe rather than Asia. As a result, the JKM-TTF spread flipped into negative territory, leading traders to divert LNG cargoes towards Europe.

The benchmark front-month contract at the Dutch TTF hub reached its highest level since November 23, 2023, trading at 46.00 euros per megawatt hour on Monday. Meanwhile, the Asian benchmark Japan Korea Marker (JKM) was trading at around $14/mmBtu. Several LNG tankers, including the Vivert City, Gaslog Windsor, and BW Lesmes, diverted from their original destinations in Asia to Europe, specifically to terminals in the UK. This shift was partly due to the availability of unloading slots at UK terminals compared to Continental terminals.

Despite the disruptions in gas supplies, Russian gas exports through Ukraine to Europe remained stable on Monday, according to Gazprom. However, Ukraine has announced that it will not extend a gas transit deal with Russia once the current agreement expires at the end of the year. The situation highlights the complex dynamics influencing LNG trade routes and pricing in the global market.

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