Qatar Continues to Drive ME's Intl. LNG Trade Flow: IGU

In its latest report, IGU noted that the LNG trade flow between the Middle East and Asia accounted for 43.29 million tons in 2023, driven by Qatar LNG supplies to China, India and Pakistan.

In 2023, global LNG trade flows remained concentrated within Asia Pacific, with Asia Pacific-to-Asia Pacific trade flows having the highest absolute value (95 million tons). The third largest trade flow was from the Middle East to Asia at 43.29 million tons last year, as compared to 41.25 million tons in 2022, which was a 4.93% or 2.03 million tons increase.

Major contributors to this trade flow include Qatar to China (16.75 million tons), Qatar to India (10.92 million tons), and Qatar to Pakistan (6.32 million tons). The biggest contributors to the net increase were Qatar to China (+0.70 million tons), UAE to China (+0.56 million tons), and Qatar to India (+0.37 million tons).

In 2023, inter-regional trade continued to be dominated by long-term imports, with 61.1% of net imports on the long-term, 3.8% on the short-term and 35.2% on spot. Asia and Asia Pacific remained heavy on long-term imports, with 68.9% and 69.5% of net imports on the long-term, whereas net imports on spot were only 28.2% and 27.2%, respectively.

This is consistent with purchase patterns of major players in Asia and Asia Pacific that have historically preferred long-term contracts, with spot purchases being more opportunistic depending on prevalent prices and short-term demand.

Europe has mostly purchased on the spot market, corresponding to about 48.4% of net imports, with only 46.4% on long-term. This is consistent with European purchase patterns as spot cargoes were required to make up for an abrupt loss in Russian pipeline flow. Latin America purchases most of its cargoes in preparation for winter in the Southern Hemisphere, of which 65.5% of net imports are on the spot market, while long-term purchases are at 34.5%.

According to IGU, intra-Asia Pacific flows were made up primarily of flows coming from Australia, which contributed to 54.75 million tons. The most dominant intra-Asia Pacific trade flow was Australia-to-Japan (27.61 million tons), then followed by Australia-to-South Korea (10.74 million tons) and Malaysia-to-Japan (10.43 million tons).

Intra-Asia Pacific trade flows declined by 2.1 million tons from 2022 to 2023. There were several notable increases from Australia to Thailand (+1.32 million tons), intra-Indonesia flows (+0.88 million tons), Malaysia to South Korea (+0.69 million tons). However, contributing to a slight net decrease was Australia to Japan (-3.11 million tons), Malaysia to Japan (-1.58 million tons) and Australia to South Korea (-1.08 million tons).

The second largest trade flow between two regions was from North America to Europe at 56.63 million tons. The biggest drivers of this trade flow were from the US to the UK (8.81 million tons), the US to Spain (5.32 million tons) and the US to Germany (4.14 million tons).

This trade flow remained almost constant year on year, mainly driven by the US to Netherlands (+4.95 million tons), the US to Germany (+4.14 million tons), and the US to Italy (+1.62 million tons). There were also decreases along this trade route, particularly the US to Spain (-3.12 million tons), the US to France (-1.14 million tons), and the US to Turkiye (-1.13 million tons).