Bulletin Updates
Our exclusive: LNG market in complete tizzy: $100 million arbitrage opportunity on a single cargo now – 13 Jan 2021
Jan 13, 2021
The global gas market is in a complete tizzy
A January 2021 cargo was sold by Exxon at ~$35/MMBtu or >$200 boe. This is an unheard-of rate
Then again, on January 11, 2021, an al time high JKM price of $28.2/MMBtu was established.
Japanese power prices are at $400/MMbtu, a scale never seen before.
The arbitrage opportunities between Henry Hub and Asian prices is incredibly massive, and GAIL can make the biggest killing ever, except for the fact that most of its US cargoes are already fully tied up
The US cargo value is a mere $10.8 million and by the time it reaches Asia the value goes up to a massive $112.8 million.
A cargo can yield an arbitrage of an incredible $100 million. 10 cargoes and you make a billion dollars. This is unbelievable economics.
PLL can very well take its oil price linked cargoes out of RasGas and sell it at JKM rate and make a whole lot more money than it can by processing that cargo through its Dahej terminal. This looks like a once in a lifetime opportunity.
LNG cargo rates have hit the ceiling too. With that kind of arbitrage available, the spot cargo rate is close to 0.5 million a day.
European storage levels have plummeted given the huge arbitrage available between European and Asian prices.
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