Source: Timera Energy
Price levels: Spot prices for delivery in Nth Asia are rapidly rising towards 10 $/mmbtu. This has opened up a 2.5 $/mmbtu gap to TTF (exceeding variable transport costs).
China key: Chinese buyers are driving prices higher, given the ongoing policy push to gas, strong industrial demand and building of inventories ahead of winter.
Other demand: Competition for spot cargoes is also coming from Japan & Korea (low storage balances after a cold winter) as well as India & Pakistan.
Supply constraints: Unplanned & maintenance outages are restricting supply over the summer (e.g. Gorgon, Sabine Pass, Sakhalin, Angola), with new Australian volumes unlikely to ramp up until Q3/Q4.
Europe impact: The Asian spot vs TTF price differential will see flexible LNG supply diverted to Asia, with cargo reloads coming back into the money. This will support summer prices at NBP/TTF.