Vietnam Buys More LNG as Temperatures Set to Rise Above Average

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(Bloomberg) — Vietnam is importing more liquefied natural gas at elevated prices as the Iran war curbs global supplies, with the country bracing for above-average temperatures in the coming weeks. 

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The next two weeks are forecast to be hotter than normal in the Southeast Asia country, with swathes of anomalous warmth of up to 3C above average blanketing much of the north and parts of the south, including Hanoi and Ho Chi Minh City, according to the European Centre for Medium-Range Weather Forecasts. Temperatures are also expected to be slightly above normal in May and June, according to the weather model.

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The country has imported about 276,000 tons of LNG so far this month, according to ship-tracking data compiled by Bloomberg. That’s already a monthly record and more than double the amount in the same period last year. April shipments also far surpass volumes in the preceding months, like the 70,000 tons bought in March, the data showed. Meanwhile, data from Kpler shows Vietnam importing 191,000 tons so far in April, also higher than any previous month.

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Thailand and Singapore have also been buying LNG from the spot market, but Vietnam has seen the most notable increase in imports among its Southeast Asian neighbors. State-owned Petrovietnam Gas JSC has issued tenders for several spot cargoes in the past two months for delivery through June. It most recently sought to purchase a prompt April cargo on Thursday.

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Vietnam is among several nations urgently seeking LNG at a time when spot prices have surged due to the conflict in the Middle East. With top producer Qatar’s capacity hobbled by Iranian strikes and the effective closure of the Strait of Hormuz — through which a fifth of global supply passes — the market for the super-chilled fuel is seeing greater competition between Europe and Asia for limited cargoes. 

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Other countries, including Indonesia and India are also expected to see unseasonal warmth in the months ahead, according to the ECMWF. That’s likely to boost power consumption and demand for gas, which could further strain global supplies.

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Industries and consumers are also turning to alternative energy sources. Vingroup has proposed to the government that it be allowed to replace a planned LNG project with renewable power due to surging fuel prices linked to the war.

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