UKMTO Reports Skiff Fired on LNG Tanker off Yemen as TTF-Henry Hub Gap Reaches $25.68 per MMBtu

UK Maritime Trade Operations reported that a small skiff carrying seven people fired two shots at an LNG tanker 140 nautical miles southwest of Al Mukalla, Yemen, on Oct. 17, and that the tanker's armed security team fired two warning shots, forcing the skiff to alter course. European gas prices edged higher into the new week, with ICE Endex Dutch TTF November futures settling at 88.04 euros per megawatt-hour on Oct. 19, up 0.6% from Friday.

UKMTO Incident 176: LNG Tanker Fired On in the Gulf of Aden

The report, UKMTO incident 176, was one of 12 attack reports the agency logged from Oct. 12 to Oct. 17. Most of the others were in the Strait of Hormuz and the Arabian Gulf, including two tankers struck northeast of Al Jubayl, Saudi Arabia, on Oct. 16. UKMTO advised vessels to transit with caution and report suspicious activity.

The Gulf of Aden sits on the route between the Red Sea and the Indian Ocean. Any rise in risk there affects LNG cargoes moving between the Middle East, Europe and Asia, and raises the cost of insurance and security for carriers that use it. The U.S. Energy Information Administration said in its October Short-Term Energy Outlook that tanker rates reached record levels in September, reflecting higher insurance costs and longer routes around conflict zones.

TTF-Henry Hub Gap Is Worth About $89.9 Million per LNG Cargo

At the European Central Bank's Oct. 19 reference rate of US$1.1225 per euro, 88.04 euros per megawatt-hour equals about US$28.96 per million British thermal units. Henry Hub spot gas was US$3.28 on Oct. 19, according to the EIA, leaving a gross gap of US$25.68 per million British thermal units, Oil Authority calculations.

A conventional LNG cargo carries roughly 3.5 trillion British thermal units of gas, an Oil Authority working assumption. At that size, the gross difference between U.S. and European gas prices is about US$89.9 million per cargo, before liquefaction fees, shipping, insurance and regasification. The figure shows the scale of the incentive for U.S. exporters, not the margin they capture.

The EIA forecasts U.S. LNG gross exports of 18 billion cubic feet per day in 2026 and 19 billion in 2027. At the Oct. 19 spread, 18 billion cubic feet per day represents roughly US$479 million of gross daily price difference across U.S. export volumes, Oil Authority calculations, although much of that gas is sold under contracts with set fees.

EU Gas Storage at 74.61% Against 3,567 Bcf in U.S. Storage

Gas Infrastructure Europe data show EU storage at 74.61% full on Oct. 19, against 82.84% a year earlier, with Germany at 61.19%. Our EU storage report put the shortfall against last year at about 94 LNG cargoes. U.S. inventories were 3,567 billion cubic feet for the week ended Oct. 9, and the EIA expects them to remain above the five-year average in most months.

JEPX Power at 31.15 Yen Shows Asian Demand for LNG Cargoes

Japan Electric Power Exchange's system price for Oct. 20 delivery cleared at 31.15 yen per kilowatt-hour, the highest since December 2022, as covered in our Japan power report. Asian utilities and European buyers are competing for the same spot cargoes as winter approaches.

The International Energy Agency said in its Oct. 14 Oil Market Report that product and LPG exports from the Gulf remain below half of pre-war levels. The EIA estimates Qatar's crude production shut-ins at 100,000 barrels per day in September, within a regional total of 4.77 million barrels per day.

Alberta AECO Gas at US$1.58 Supports West Coast LNG Exports

Alberta Treasury Board and Finance reported AECO-C gas at C$2.12 per gigajoule on Oct. 15, equal to about US$1.58 per million British thermal units. Western Canadian gas is priced even further below TTF than Henry Hub is, which supports the case for LNG export capacity on Canada's West Coast, where Pacific routes to Asia avoid the Gulf of Aden and the Strait of Hormuz.

UKMTO Gulf of Aden Reports and EIA Gas Storage on Oct. 22

UKMTO's incident log will show whether attacks spread further along the Gulf of Aden route. The EIA's weekly gas storage report is due on Oct. 22, and AGSI will show when EU storage records its first net withdrawal of the season.