LNG Tankers Divert to Europe After Russia Halts Austrian Supplies

At least five cargoes of LNG have diverted from Asia to Europe in the past few days, drawn by higher gas prices on the continent after Russia's Gazprom halted supplies to Austria's OMV, data from analytics firm Kpler showed.

On Saturday Gazprom halted supplies to top Austrian gas importer OMV after OMV threatened to impound some of the Russian state firm's gas as compensation for an arbitration it had won over a contractual dispute.

Gazprom notified OMV of the planned halt on Friday, causing European gas prices at the Dutch TTF hub to surge, making it more profitable to send gas to Europe rather than Asia.

"The JKM-TTF spread flipped into negative territory last week amid Russian pipeline gas supply concerns and an upcoming cold spell, which saw traders divert LNG cargoes away from Asia and towards Europe," said Laura Page, manager of gas and LNG insight at Kpler.

The benchmark front-month contract at the Dutch TTF hub TRNLTTFMc1 was trading at 46.00 euros per megawatt hour on Monday, or $14.49 per mmBtu, the highest level since Nov. 23, 2023. The Asian benchmark Japan Korea Marker (JKM) was trading at around $14/mmBtu, LSEG data showed.

Vivert City LNG tanker, which loaded a cargo from Equatorial Guinea and was heading to Bangladesh, diverted on Friday and is now heading towards Britain's South Hook terminal.

Gaslog Windsor tanker, which had a cargo loaded with U.S. LNG from Sabine Pass that was initially headed to China, changed its destination on Friday towards Britain's Isle of Grain terminal.

BW Lesmes tanker had a cargo loaded form Nigeria and was initially headed to China but changed direction towards Britain's Isle of Grain.

"One of the main reasons ships are switching to the UK, though, is likely that the UK's terminals weren't so busy as some of the main Continental terminals, meaning there were more spare unloading slots for traders to access when they decided to divert Asian cargoes to Europe," said Alex Froley, senior LNG analyst at data intelligence firm ICIS.

The Diamond Gas Crystal, originally headed to South Korea, has switched back and is now heading to the Dutch Gate terminal.

The Flex Vigilant tanker has diverted from China and is now headed to Europe, awaiting orders.

Russian gas exports through Ukraine to Europe - the main transit route for Russian gas to the EU - were stable on Monday, according to Gazprom.

Ukraine has said it will not extend a gas transit deal with Russia once a five-year agreement expires at the end of the year.

(Reuters - Reporting by Marwa Rashad; Editing by Susan Fenton)