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Asia's demand for US LNG remains strong in May

This is driven by imports in Japan, India, and South Korea.

Asia is still the preferred destination for US free-on-board liquified natural gas cargoes in May, with India, Japan, and South Korea resuming their buying activity.

In a report, Rystad Energy said Indian importers, which include the Gujarat State Petroleum Corporation purchased a cargo worth around $11 per metric million British thermal units (MMBtu) for late June and early July, whilst Indian Oi Corporation and Gail purchased cargoed for June.

Meanwhile, South Korean importer Posco bought a spot LNG cargo and Korea Midland Power also sought a cargo, both for July delivery.

Meanwhile, in Japan, local utility Tohoku Electric Power orders a mid-July delivery cargo opting for high gross heating value.

ALSO READ: Japanese utility firms into serious business of reselling LNG surplus

Kansai Electric Power also bought LNG for July because its 900-megawatt Maizuru cola power plant unit 1 stopped operation on 9 May until 5 July, and the plant’s 900 MW unit 2 will remain closed until 29 July.

Japan’s major utilities have a combined LNG storage level of 2.6 million tonnes as of May, which is 7.1% higher than the five-year average ending in May, but is 6.2% lower year-on-year.

"Asia remains the preferred destination of US free-on-board (FOB) LNG cargoes as the arbitrage has been mainly open for May. Therefore, we may see additional US-origin LNG being offered in Asia for June and July delivery, though the majority of US-origin LNG has been discharged into Europe since last year,” said Masanori Odaka, senior analyst at Rystad Energy.

 

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