Traders expect imminent 'massive' LNG imports from the Middle East
Last year, LNG imports into Jordan, Kuwait and the UAE received 19 cargoes, or 1.6 Bcm of natural gas equivalent in the first quarter. This compares with 4 cargoes or 399 million cu m this year over the same period. "We have not seen the usual counter-seasonal buyers yet," said a trader.
"I think the Middle East will simply appear with a massive tender soon, and keep a handful of spot Qatari cargoes to themselves [instead of going to Asia]," he added.
During summer, demand in the region is much higher than in the rest of the year due to the air conditioning utilization.
"Given historical buying patterns, this tender will almost surely be won by Qatar regardless of current geopolitical tensions, which have not changed Kuwait, Oman and the UAE's buying patterns from Qatar," Platts Analytics said.
Participants agreed that while the demand in the region should pick up significantly, prices in Europe and Asia might not be impacted much.
"While that is a significant amount of gas for Qatar to keep in the region, it is not enough to add massive upside to Platts JKM Asian benchmark, especially given the large supply growth we have seen since this time last year (about 60 million cu m/day) and the weaker-than-average Asian demand at the moment," Platts Analytics said.
In addition, Qatar's exports to Egypt have been suppressed since last October, as the Egyptian government halted imports on the back of growing domestic production from the Zohr field.
This in turn will dampen the effect of Kuwaiti demand, Platts Analytics said. ■