Analysis: Oil majors beat traders, gas rivals to cash in on LNG price spike

SINGAPORE/PARIS/LONDON (Reuters) – Global energy majors including Royal Dutch Shell and Total are expected to benefit most from January’s gas price spike, beating rival trading houses and non-integrated producers thanks to their access to multiple sources of the fuel.

Asian liquefied natural gas (LNG) prices have rocketed to record highs in January due to low stocks, a cold winter, global production outages and shipping delays. They have outpaced prices in much of Europe and the United States, where gas is abundant, creating an arbitrage opportunity for sellers.

Several companies and traders have rushed to meet the Asian demand, but have struggled to find volumes for quick delivery.

However, majors such as Shell and Total, with access to multiple sources of gas, have been able to re-route U.S., Nigerian and Qatari gas tankers previously destined for Europe to Asian markets.

“Some of our long-term contracts include possibilities for diversions. We are ‘reshuffling’ cargoes that are flexible to direct them to premium markets,” said an executive with one major, speaking on condition of anonymity. Reuters News

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