GLOBAL LNG-Asia spot LNG prices at highest level since end-2022 after Iran's strikes on Qatar
By Marwa Rashad
LONDON, March 20 (Reuters) - Asia spot liquefied natural gas prices hit their highest mark since end-2022 this week, after QatarEnergy's CEO Saad al-Kaabi told Reuters Iranian attacks had knocked out 17% of Qatar's LNG export capacity.
Repairs would sideline 12.8 million tons per year of LNG, or 3% of global supply, for three to five years, he said.
The average LNG price for May delivery into north-east Asia was estimated at $25.30 per million British thermal units (mmBtu), the highest level since end-December 2022, and up from $19.50/mmBtu the previous week, industry sources said.
"Asian and European gas prices will remain supported into next week following attacks on Qatar's 77mtpa Ras Laffan facility, which will likely intensify inter-basin competition for LNG supply," said Ronald Pinto, gas research principal analyst at Kpler.
Two of Qatar's 14 LNG trains and one of its two gas-to-liquids (GTL) facilities were damaged in the unprecedented strikes. QatarEnergy will have to declare force majeure on long-term contracts for up to five years for LNG supplies bound for Italy, Belgium, South Korea and China due to the two damaged trains, Kaabi said.
"The strikes and subsequent damage to infrastructure has shifted into a systemic and exponential crisis for the energy complex. With little to no spare capacity to replace what has been removed," said Toby Copson, managing partner at Davenport Energy.
"We will see potential parabolic spikes as this moves through the system. We could expect higher prices for longer as both basins compete for volume amid sustained volatility," Copson said.
Higher prices have led to some demand destruction already, with South Asian countries Pakistan, India and Bangladesh less willing to pay for expensive spot cargoes, and instead turning to coal or winding down demand. Egypt has also put in place demand-restricting measures, said Martin Senior, head of LNG pricing at Argus.
In Europe, gas prices touched their highest level since January 2023, after Iran's strikes caused extensive damage to QatarEnergy facilities. They were hovering around 60 euros per megawatt hour on Friday afternoon, 59% higher than pre-war levels.
"Colder temperatures and lower wind speeds in Northwest Europe as well as sustained strong LNG spot demand in South Asia will contribute to the bullish momentum," said Kpler's Ronald Pinto.
Hedge funds extended their net long position in TTF futures last week amid the spiralling Middle East energy war, said Seb Kennedy, independent analyst at Energy Flux News.
"Funds now hold their biggest net long position since February 2025. It is highly likely they are building an even larger bullish position across near- and long-dated TTF maturities following the devastating strikes on Iranian and Qatari natural gas infrastructure this week," he said.
S&P Global Energy assessed its daily Northwest Europe LNG Marker (NWM) price benchmark for cargoes delivered in May on an ex-ship (DES) basis at $20.728/mmBtu on March 19, a $0.195/mmBtu discount to the price at the TTF hub.
Argus assessed the price at $20.60/mmBtu, while Spark Commodities assessed it at $20.521/mmBtu.
"Bullish sentiment was further reinforced by intensifying competition for prompt cargoes. Europe faced growing pressure from both traditional and emerging buyers, including Egypt and importers across South and Southeast Asia, as the supply shock rippled across global markets," said Aly Blakeway, manager of Atlantic LNG at S&P Global Energy.
In global LNG freight, Atlantic rates rose on the news from Qatar and were assessed at $181,750/day, while Pacific rates slipped to $141,750/day, said Spark Commodities analyst Qasim Afghan.
