Nigeria LNG cargo diverted to Asia amid price surge
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A cargo of liquefied natural gas from Nigeria has been diverted to Asia after a surge in regional prices created an arbitrage opportunity for traders, according to a report by Reuters.
Data from analytics firm Kpler showed that the LNG tanker BW Brussels, which loaded a shipment at the Nigeria LNG Bonny Island Terminal on February 27, initially signalled a westward journey toward Europe before altering its route and heading south toward Asia via the Cape of Good Hope.
Analysts said the diversion reflects the widening price gap between Asian and European gas markets following disruptions to supplies from the Middle East.
According to Reuters, Asia’s benchmark LNG price surged sharply last week as the ongoing conflict between the United States and Iran and a production suspension in Qatar tightened global supply.
The benchmark Japan-Korea Marker for spot LNG cargoes jumped by 68.52 per cent to $25.393 per million British thermal units for April delivery last Tuesday, its highest level in three years, according to S&P Global Platts.
In comparison, spot LNG prices for deliveries to northwest Europe rose by about 57 per cent to $15.479 per mmBtu for April, reflecting a strong rally but still leaving Asia as the more lucrative destination for flexible cargoes.
Market analysts said the widening price spread between Asia and Europe has opened arbitrage opportunities for traders to redirect LNG shipments from the Atlantic Basin to Asian buyers willing to pay a premium.
“So far, one LNG tanker that loaded in Nigeria last week has diverted to Asia from its initial Atlantic-bound course after spot prices surged. The BW Brussels LNG tanker loaded a cargo from Bonny LNG in Nigeria on February 27 and was moving west before turning to head south on March 3, data from Kpler showed.
“BW Brussels appears to have changed course from an initial signal toward France and is now heading toward Asia via the Cape of Good Hope,” Reuters reported, quoting a principal insight analyst at Kpler, Go Katayama.
Spark Commodities analyst Qasim Afghan said global front-month arbitrage opportunities had “increased significantly” and were now open to Asia across several major LNG export locations.
He added that the price differential between Asian LNG and Europe’s benchmark gas hub, the Title Transfer Facility in the Netherlands, had widened to about $5 per mmBtu in favour of Asia.
The diversion of the Nigerian cargo highlights how rapidly shifting global prices can alter LNG trade flows, particularly for shipments with flexible destination clauses.
“This likely reflects the widening Atlantic–Pacific arbitrage, with stronger Asian pricing making diversions of destination-flexible Atlantic cargoes more attractive,” Katayama said, noting that more cargoes could follow if the price spread persists.
It was gathered that the tightening market has also prompted Asian buyers to scramble for alternative supplies following the disruption to Qatari exports.
Government sources told Reuters that India is scouting for alternative LNG sources to replace lost Qatari supply, while state-run energy company Petrobangla plans to issue tenders for prompt LNG cargoes.
Analysts at S&P Global Energy said Asia-Pacific buyers were likely to be the most aggressive in the near-term spot market as they compete to secure supply.
However, they noted that Europe could still attract some flexible cargoes because of the deep liquidity in the TTF financial market, which allows traders to hedge risks more easily.
Qatar is one of the world’s largest LNG exporters, and Asian buyers account for more than 80 per cent of its shipments, according to Kpler data. The disruption to production there has tightened supply and triggered intense competition between the Atlantic and Pacific basins for available cargoes.
For Nigeria, the shift underscores the role of global price signals in determining cargo destinations in the highly flexible LNG market.
Industry analysts say that if Asian prices remain significantly higher than those in Europe, more LNG shipments from Atlantic producers could be redirected eastwards in the coming weeks.
