Asia's imports of liquefied natural gas (LNG) are poised to drop significantly in February, marking the lowest level in nearly two years.
This decline is attributed to Asian buyers avoiding expensive spot cargoes, with prices at least 50% higher compared with the same period last year, reported Reuters.
A milder-than-usual winter across north Asia has reduced demand, enabling European buyers to bid for LNG cargoes to replenish depleted inventories.
Asia, the top-importing continent for LNG, is expected to receive 20.7 million tonnes (mt) of the super-chilled fuel in February, down from 24.59mt in January and 22.67mt in February last year, according to Kpler.
Conversely, Europe's LNG imports for February are expected to be 11.81mt, closely matching January's 11.84mt.
These numbers are the third and fourth highest ever recorded. February’s imports evaluated daily are the second highest, following April 2023.
Europe’s increased reliance on LNG is driven by the cessation of Russian pipeline supplies through Ukraine at the start of January, the report said.
This, coupled with the loss of pipeline gas from Russia following Moscow's February 2022 invasion of Ukraine, has heightened demand.
The US, now the largest LNG exporter, is meeting much of Europe's demand.
Europe's imports from the US are projected to hit 6.53mt in February, a slight decrease from the record 6.84mt in January.
Nonetheless, February's daily imports are at an unprecedented high, almost three times the 2.3mt bought from the US in July 2024.
The increasing reliance on US LNG could strengthen Europe's stance in negotiations with US President Donald Trump, who is raising tariffs to promote further purchases from the US.
Europe’s LNG demand is also pushing spot prices close to the European benchmark, TTF, which stood at €46.06 ($48.2) per megawatt hour (MWh) on 21 February, equivalent to $14.12 per million British thermal unit (MBtu).
Spot Asian LNG prices ended at $14.00/MBtu in the week to 21 February, down from a 14-month high of $16.10 the previous week.
The easing of prices in Asia follows the peak winter demand and the high prices since November, which have curbed demand.
