LONDON: Argentina launched two liquefied natural gas (LNG) tenders seeking up to 32 shipments for delivery over the next year under terms allowing it to cancel most deliveries if spot prices at the time prove more favourable, trade sources said.
Argentina's state-run energy firm Enarsa is seeking eight cargoes for delivery between September and October this year. Five are earmarked for the country's Bahia Blanca terminal, with three due for the river-terminal at Escobar, traders said.
For 2018, Enarsa's tender terms give it the right to cancel cargoes should spot prices closer to the date of delivery prove more attractive.
Under this tender, Enarsa is seeking 12 cargoes apiece for the Bahia Blanca and Escobar terminals over the March to October delivery period, traders said.
One trading source said the unusual terms curbed interest from suppliers unwilling to hand Enarsa a free option to cancel cargoes.
"This year they paid a high price for LNG," another trade source said.
"Their new strategy is if spot prices go up, they will take the cargoes bought under this tender, but if not they will go into the spot market - which could in itself cause a different kind of mess," he said.
Most offers submitted by suppliers for this tender will be above prevailing market rates due to cancellation risk, he added.
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