Global LNG deliveries rise further in July

Worldwide LNG receipts rose from a year earlier for the fifth consecutive month in July, with strong Asian and Latin American demand continuing to draw supply away from Europe.

Overall LNG deliveries rose to 30.4mn t of LNG in July, from 28.9mn t a year earlier and 29.9mn t in June, preliminary ship tracking data from oil analytics firm Vortexa show. Global receipts have risen on the year since March, having fallen short of the previous year's figures in November-February.

Stronger Asian and Latin American receipts reduced supply available for European buyers last month. Asia accounted for 74.6pc of global demand, with the region taking 22.6mn t, up from 20.5mn t a year earlier, while Europe received only 4.43mn t, down from 5.5mn t a year earlier. Northeast Asian markets absorbed about 79pc of Asian demand, with Japanese receipts being the quickest at 6.74mn t, followed by China, which imported 6.05mn t, and South Korea taking 3.97mn t. Japan reclaimed its spot as the largest global importer last month, after falling short of China's receipts in April-June.

Above-average temperatures in parts of China and South Korea in July, along with strong buying activity ahead of the winter, probably lifted LNG deliveries to the region last month.

But deliveries to south Asia fell to 3.1mn t last month from 3.6mn t a year earlier, with a drop in Indian receipts offsetting a small rise in deliveries to Pakistan and Bangladesh. India imported 1.9mn t last month, down from 2.67mn t a year earlier, amid stronger domestic production and higher spot LNG prices reducing the incentive to bolster spot purchases. The start-up of new offshore fields in India's Krishna Godavari basin has probably curbed LNG deliveries to the country in recent months, while a resurgence in Covid-19 infections in the country also may have continued to weigh on city gas and industrial demand.

By contrast, Latin American receipts last month reached a multi-year high and were at their quickest for any month since at least January 2016, driven mainly by strong Brazilian demand. The country imported 1.31mn t in July, up from zero a year earlier and 637,800t in June, as record-low hydroelectric stocks weighed heavily on the country's main source of power generation and boosted the call on gas-fired generation plants. Argentinian receipts also rose, to approximately 700,000t last month from 624,200t in June and 551,000t a year earlier. Combined Jamaican, Dominican Republic and Puerto Rican receipts rose sharply to 314,800t in July from 24,500t a year earlier, which was already sufficient to offset lower Mexican deliveries. These fell to 77,200t in July from 200,000t a year earlier, as stronger pipeline deliveries continued to cut LNG demand.

The drop in European receipts compared with a year earlier stemmed mainly from slower deliveries to Mediterranean terminals, which fell to 2.04mn t in July from 3.01mn t a year earlier. Quicker Algerian pipeline flows reduced the need for brisk LNG deliveries to Spain and Italy, with near-curve contracts at Italy's PSV gas hub at a discount to the Dutch TTF also discouraging spot purchases. Spanish receipts fell to 900,000t from 1.44mn t, while deliveries to Italy dropped to 675,200t from 991,400t.

Northwest European receipts edged lower to 1.93mn t from 2.26mn t, amid an open inter-basin arbitrage for most of the month reducing the spot supply pool available to buyers in the region. Deliveries to the UK and the Netherlands dropped most heavily, with combined receipts to the two countries falling to 324,000t from 1.04mn t.

By Ellie Holbrook

Global LNG deliveries, y-o-y change mn t