Atlantic LNG cargo market seeing wide range between bids, offers on prompt

Bid-offer spreads for prompt Atlantic LNG cargoes have widened as demand has dried up and slot access has tightened at some hubs, making optimization challenging, traders said.

Large discounts to Dutch TTF seen at regional hubs such as NBP in the UK and PVB in Spain were likely restraining prices, market sources said. These hubs correspond to the hubs with better availability of regasification slots on the prompt. Likewise, the sharp discounts would dissuade buyers from acquiring cargoes at higher prices. Consequently, some market players may be encouraged to move LNG cargoes out of Europe.

Recent bids for prompt Northwest Europe delivered LNG cargoes have been heard around TTF minus $15/MMBtu, while offers have been heard at around TTF minus $10/MMBtu. Some market participants have heard tradable value higher, while others have indicated it near the low end of the range. Platts DES Northwest Europe for September was assessed July 19 at a $12/MMBtu discount to the TTF hub front-month price.

"Nobody knows where the market is," an Atlantic-based trader said. "Depends on the hub. And there is no demand. It is so, so quiet. For this reason, we heard a huge range of discounts and different bids and offers."

The wide bid-offer spreads for physical cargoes have made it difficult to determine fair value at the hub and for regas, storage and slot costs, and thus be able to optimize volumes effectively, the trader said.

"Trying to find out where the market is for FOB cargoes in order to know if there is more interest between DES and FOB," the trader said.

Platts DES Northwest Europe for September was assessed at $34.983/MMBtu July 19, down 36.2 cents/MMBtu on the day, according to S&P Global Commodity Insights. Across the Atlantic, the Platts Gulf Coast Marker for US FOB cargoes loading 30-60 days forward was assessed at $34.00/MMBtu, down 50 cents/MMBtu on the day.