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US shifts LNG exports to Asia

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LNG Industry,

According to the latest Reuters report, the biggest divergence between US and Asian gas prices in a year has created an opportunity for tankers delivering LNG, with most departures from the Sabine Pass in the last month-and-a-half heading toward East Asia.

US gas prices at the Henry Hub benchmark in Louisiana this week dropped about 20% since hitting a two-year high on 28 December.

Spot gas in Asia has soared by more than 30% since early December to a near two-year high.

The premium of Asia over US gas has reached its highest level since January 2015, presenting an arbitrage opportunity that LNG traders have rushed to fill.

In addition, China is looking to avoid previous gas shortages that the country has experienced in the past.

Of the 17 LNG vessels that left Sabine Pass in Louisiana since the start of December, at least 10 have either delivered their cargoes in East Asia or were moving in that direction across the Pacific Ocean.

Those 10 included the first shipments from Sabine to both Japan and South Korea.

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