Storage terminals across Asia are reporting tank tops, leading to LNG suppliers requesting cargo deferrals. Korea and Japan are seeing high gas inventory levels due to a mild winter, as China and India terminals are seeing weaker demand for LNG.
The high inventory situation is resulting in LNG importers taking steps to delay shipments by extending the waiting time for LNG carriers or asking suppliers to push delivery dates until capacity is available, according to S&P Global Commodity Insights. A surplus of gas in Korea means that, unless the weather in Asia gets colder and the demand increases in Europe, vessel congestion could get worse. Some entities may need to defer deliveries or even rent other terminals to store surplus LNG.
China has often been a back-up LNG supplier for Asian buyers looking to purchase a surplus – but it’s unlikely to be needed this year as demand has remained sluggish. Meanwhile, despite seeing a drop in LNG imports this year, India is experiencing a tank-top situation too, with some cargo deliveries postponed by up to four days.
