At least 57 US LNG cargoes have been cancelled by buyers and more are expected to walk away from shipments, according to broker and consultant Poten & Partners.

Wong Kit Ling, head of south Asia and Middle East for Poten's business intelligence unit, said this was just the latest figure for the market's summer period.

But she added: “We are expecting to see even more on the 20th, which is today, where US buyers have to meet the contractual deadline on the 20th to cancel their cargoes 60 days ahead.”

Giving a snippet of what might be to come, Wong said that of the 16 cargoes scheduled to be loaded from US producer Freeport LNG in July, Poten has heard of 10 that have been cancelled.

She said Poten has also seen companies offering to resell their cargoes on spot, mid-term or long-term basis.

In Europe, she said gas prices are now heading to new lows and sendout rates are at record highs.

She said that with higher prices in Asia, more vessels are flowing from Europe to this region.

But she added: “We still believe there remains enough shipping capacity and spot charter rates will remain low.”

On the rebound

Giving a snapshot of Asian LNG demand, Wong said buyers in the region have rebounded quite quickly and are back in the market with mid-term to long-term plans. She detailed that Poten has seen eight pieces of buying interest in the market, five of which are from new buyers in North East and South East Asia.

She said the market is seeing opportunistic buying from China. India is also expected to return as a buyer, especially if prices remain below $3 per MMBtu, she added.

But the Poten analyst said LNG inventories remain high in South Korea following a mild winter, while demand in Japan and Indonesia remains weak, with the latter's state energy company, Pertamina, cancelling some cargoes.

Wong said the US is bearing the brunt of production cuts given the tolling contract structure at many of its liquefaction plants, which also makes it less competitive.

She said Qatar and Malaysia have also cut back, but Australian production is relatively stable.

In contrast, Nigeria LNG produced more LNG in April, with some showing up a floating cargoes with one cargo being on the water for more than 60 days.

Wong said Asia-Pacific demand growth in the period to 2030 will be led by China, India and South East Asia. Vietnam, the Philippines, Sri Lanka, Myanmar and Cambodia expected to join the ranks of LNG importers.

Bangladesh and Pakistan are also expected to grow due to declining

South Korea may also grow its LNG imports after the government said it plans to shut 30 coal-fired power stations by 2034.

“The market is currently riding out a structural oversupply where prices remain depressed, but we do expect the market by mid-2020s to tighten due to project delays,” Wong said.