Asia’s liquefied natural gas (LNG) imports are set to hit a near two-year low in February, as soaring prices prompt buyers to seek alternatives.
The continent’s LNG intake is projected to reach just 20.7 million tonnes (mt) this month, a significant drop from 24.59mt in January and 22.67mt in February of the previous year.
This decline is primarily attributed to Asian buyers shying away from expensive spot cargoes, which are currently trading at prices at least 50 per cent higher than those seen during the same period in 2024.
The high prices, coupled with a milder-than-usual winter across North Asia that has dampened demand, have created an environment where European buyers are able to outbid their Asian counterparts for available LNG cargoes to replenish their inventories.
While Asian imports are slumping, Europe’s LNG demand remains robust.
February imports are expected to reach 11.81mt, closely mirroring January’s 11.84mt.
These figures represent the third and fourth-highest monthly totals ever recorded, with daily import rates for February ranking as the second highest, trailing only April 2023.
The surge in European demand is largely due to the cessation of Russian pipeline supplies through Ukraine at the beginning of January, further exacerbated by the loss of pipeline gas from Russia following Moscow’s invasion of Ukraine in February 2022.
The United States has stepped up to meet a significant portion of Europe’s LNG needs, becoming the region’s largest supplier.
US LNG imports to Europe are projected to reach 6.53mt in February, a slight decrease from the record 6.84mt in January.
However, daily import rates from the US are at an all-time high, nearly tripling the 2.3mt purchased in July 2024.
This growing reliance on US LNG could potentially strengthen Europe’s negotiating position with US President Donald Trump, who is advocating for increased tariffs to encourage further purchases from the US.
Europe’s strong LNG demand is also impacting spot prices, pushing them closer to the European benchmark, TTF, which was valued at €46.06 (US$48.2) per megawatt-hour (MWh) on February 21.
This translates to US$14.12 per million British thermal units (MBtu).
Meanwhile, spot Asian LNG prices concluded the week ending February 21 at $14.00/MBtu, a decrease from the 14-month high of US$16.10 recorded the previous week.
The price easing in Asia comes after peak winter demand and the elevated prices observed since November, which have effectively curbed demand in the region.
