Equinor's LNG Expansion Bets Big on Asian Markets and Winter Gas Prices

Equinor, Norway's energy major, has made significant strides in its Asian LNG strategy. The company aims to grow its own LNG supply book to between 10 and 15 million tonnes annually by the early 2030s.

In a recent deal, Equinor signed a long-term liquefied natural gas supply agreement with Thailand's PTT Trading, though details on volumes, durations, and financial terms remain undisclosed. This move diversifies Equinor's customer base beyond traditional European delivery routes, allowing the company to shift volumes flexibly between buyers as relative prices change.

The structure of this expanded book will index part of it to Brent crude rather than relying purely on regional spot markets, making revenues more predictable but also tying margins more tightly to global oil prices. This strategy comes at a crucial time, with European gas storage sites expected to reach only 75% capacity by November.

Analysts are optimistic about Equinor's prospects, particularly in the face of rising European gas prices. BofA Securities upgraded the stock from Neutral to Buy and lifted its price target to NOK 465.00 from NOK 400. The analysts pointed to revised commodity forecasts, predicting an average European TTF gas price of EUR 95 per megawatt-hour over the winter.