LONDON—Shipments of U.S. LNG have gathered pace in March and Europe is set to stay a top destination for spot cargoes with Asian prices still too low to ship the chilled fuel that far.

But winter demand for gas is fading, while steady supplies of gas and LNG have kept inventories well stocked, depressing European gas hub prices. This has raised the question: how many more cargoes can Europe absorb?

Suppliers of U.S. LNG have loaded 14 cargoes so far in March, setting a faster pace than February when 29 cargoes were loaded in the whole month as storms and maintenance hampered output.

Asia remains the leading destination for cargoes shipped under long-term LNG supply contracts. But Europe and Mexico are, for now, more attractive destinations for spot cargoes.

European gas hub prices trade at a discount to Asian spot prices, but the discount needs to be more than $1 per million British thermal units (MMBtu) to cover the cost of shipping the fuel the extra distance to Asia from the U.S. Atlantic coast.

The Dutch gas price, the benchmark for West European prices, was about $5.60/MMBtu on March 7, compared to about $5.80 for a spot cargo of LNG in Asia.

Netbacks, a calculation showing how much LNG sellers can get for their cargo at various destination points, also show that Britain and other European destinations have become more attractive markets than Japan and other Asian destinations.

For Mexico, spot LNG fills the gas shortfall resulting from pipeline constraints. As a neighbor to the United States, LNG shipping costs are also low.

Some LNG traders have said the arbitrage to Asia will remain closed until at least September, when Asian demand typically picks up due to the need to restock inventories before winter.

The spread between the Asian JKM forward curve and Dutch gas hub prices is not expected to exceed $1/MMBtu until August.