Competition between Europe and Asia for liquefied natural gas (LNG) cargos has eased this week, leading to a decline in global LNG prices after a period of upward pressure, according to Rystad Energy’s latest market update.

“LNG prices in both Europe and Asia fell this week as competition for spot cargoes between the two regions slowed,” said Mathieu Utting, gas and LNG market analyst at Rystad Energy.

“In Asia, even with ongoing heat across Japan and South Korea, gas demand remained subdued as strong nuclear and coal-fired generation met much of the power load

“Additional supply from LNG Canada and Asian liquefaction plants resuming operations after maintenance is expected to add further downward pressure on spot prices.”

In Asia, LNG prices for September delivery dropped 2.7 per cent to US$12 per million British thermal units (MMBtu), while October contracts declined 2.9 per cent to about US$12 per MMBtu as of July 22.

The return to full operations at Gorgon LNG after brief maintenance and the reopening of other liquefaction plants like Sakhalin 2, combined with new supply from LNG Canada, continue to weigh on spot price strength.

Despite heatwave warnings in Japan and South Korea, increased coal and nuclear power generation have limited gas demand growth, keeping spot prices under pressure.

Japan’s LNG inventories rose 3 per cent, though remain below five-year averages, and day-ahead power prices in Japan increased 9 per cent week-on-week but stayed 25 per cent lower than comparable days in 2024.

In Europe, gas prices experienced a decline following the slowdown in Asian demand.

Northwest Europe LNG prices for August delivery fell 1.32 per cent week-over-week to US$11.3 per MMBtu on July 22.

The Dutch Title Transfer Facility (TTF) benchmark also dropped 2.42 per cent to US$11.6 per MMBtu as the price differential with LNG narrowed, reflecting reduced competition between regions.

Europe’s LNG imports rose 8.5 per cent week-over-week to 2.31 million tonnes, supporting inventory builds ahead of winter.

Norwegian gas flows were temporarily affected by maintenance and outages but have since recovered.

The European Union’s recent sanctions package on Russia, which includes prohibitions related to the Nordstream pipeline, further diminishes prospects for Russian gas returning to European markets.

In the United States, NYMEX natural gas futures declined 8.4 per cent week-over-week to US$3.2 per MMBtu due to record natural gas production surpassing 108 billion cubic feet per day from July 18 to 20, offsetting demand driven by persistent heatwaves.

Feedgas to LNG terminals remained stable despite minor outages at Elba Island and Freeport LNG terminals.

Freeport experienced a compressor system issue causing an outage and restart delays, while Elba Island underwent planned maintenance.

LNG Canada’s train 1 is anticipated to reach full capacity of 7 million tonnes mid-August after earlier partial outages.

Overall, the moderation in competition between Europe and Asia combined with increasing LNG supply sources is contributing to easing global LNG prices, with further downward pressure expected as liquefaction capacity continues to ramp up this summer.

This development marks a shift from earlier months when strong demand competition kept prices elevated, particularly with Europe drawing cargos away from Asia due to its winter preparation needs and reduced Russian piped gas supplies.