Asia is a big market that usually pays premium prices for LNG. They don’t do that out of altruistic notions but rather because they need the gas more than others do. Their markets are inflexible and stiff – molecules matter there. Too much LNG and the lid pops off, too little and lights go dim. So the price for the LNG is the lesser worry. North Western Europe is the other way round. There is gas aplenty. A single cargo more or less does very little in this gargantuan, interconnected market that features plentiful seasonal storage. It makes sense for an Asian player to build a trading position in Europe to sink contracted cargos that are unwanted and to potentially source additional cargos when the sucking sound at home becomes deafening. Europe is the battlefield.
China’s top oil and gas company PetroChina is selling spot liquefied natural gas (LNG) cargoes on the European market from Russia’s Yamal plant, adding to a flood of volumes to the continent amid subdued Asian demand, trade sources said.