Asian appetite for US LNG expected to increase

The Asian economy could see an increase in LNG flows from US natural gas reserves that could offset the impact of flooding in gas-rich Australia, Marex Spectron Research said in a note published March 29.

Milder temperatures on the European continent and the uptick in the use of renewable energy resources such as wind and solar power mean natural gas demand is suppressed, leaving the bloc’s appetite for US-exported LNG waning, researchers found. Warmth in Asia, meanwhile, offers little prospect for increased US exports.

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“However, with the recent flooding in Australia, it will be likely that Asian countries rely more heavily on LNG with an expected reduction in coal,” research analyst Evangeline Cookson said.

Australia is a main LNG supplier, sending product from the Pluto, Gorgon and Wheatstone LNG facilities, as well as from Shell’s Prelude FLNG project.

Nevertheless, Asia has long been the primary destination for US LNG exports, data from the Energy Information Administration show.

Marex found from vessel tracking that even though some US carriers head to the Atlantic, they are moving to the Asian market through the Suez Canal, despite the distance.

Flows through the Suez remain impeded by the blockade from container ship Ever Given. Wedged on March 23, the vessel was freed earlier today, though the traffic jam has yet to clear fully.

All told, Marex expects US LNG flows to remain strong this week, to the tune of some 11bn ft³/day on average.