Spain was the top destination for US LNG delivered in May amid strong demand

Strong points

Robust storage filling, export opportunities to France seen

Europe continues to outpace Asia for US volumes

Spain received more U.S. LNG than any other country in May, tripling the number of U.S. shipments imported from a year earlier, as demand for gas versus power grew, and it seized opportunities to send volumes to neighboring France, S&P Global Commodity Insights data showed.

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As a bloc, Europe, plus Turkey, continued to buy an outsized share of US LNG, importing nearly two-thirds of US cargoes delivered over the past month.

As demand has fluctuated in recent months in major population centers in Europe, including Spain, there have sometimes been more LNG shipments on Atlantic waters than needed. Arbitrage opportunities have been limited by low inter-basin spreads, rising transport costs and, until recently, weak demand in Asia.

This dynamic, coupled with uncertainty over the availability of pipeline gas supplies due to Russia’s war in Ukraine, has helped drive deep discounts for North West Europe LNG compared to the Dutch domestic TTF gas hub – although these rebates have reduced since record highs in mid-May.

Spain received 15 shipments of US LNG in May, compared to 11 in April and five in May 2021. France, which was the top destination for US LNG in March and April, was No. 2 in May, with 11 shipments received . The Netherlands was third, with eight shipments, followed by the United Kingdom, with seven shipments, and South Korea, with five shipments. Europe, plus Turkey, received 58 of the 91 U.S. LNG shipments delivered in the past month.

Total gas versus electricity demand in Spain was recorded at 39.14 million m3/d on May 31 gas day, rising more than 63% over the week and reaching its highest level since April 26, according to data from S&P Global. On May 31, LNG import levels at Spanish terminals reached 89 million m3/d, rising from around 40 million m3/d over the year and reaching their highest level since April 27. The country continues to see strong LNG export opportunities to France, as well as strong demand for gas storage injection across Europe.

Amid the war’s impact on supply, Europe has tried to wean itself off Russian gas and boost stockpile levels, ahead of the upcoming winter season. Gas in storage was approaching 48% filling in the last available reading on June 3, compared to 38% in the same period a year earlier. The European Commission wants EU countries to reach 80% gas storage capacity by early November.

In the Atlantic, Platts DES Northwest Europe, Northwest Europe LNG delivery price and the Platts Gulf Coast Marker for US FOB cargoes loaded 30-60 days in advance have not been assessed on June 3 due to a public holiday in London. Platts JKM, the benchmark price for LNG spot delivered in Northeast Asia, was valued at $23.543/MMBtu on June 3, up 47.5 cents/MMBtu on the day.