LONDON: Asian spot liquefied natural gas (LNG) prices declined for a third week on producers from Australia to Nigeria boosting spot supply, strong European LNG inventories and Pakistan's cancellation of a six-cargo tender.
Spot prices for August delivery in Asia fell to $10.10 per million British thermal units (Btu), down 20 cents from the previous week, trade sources said.
Prices continued reversing from a 20-percent rally last month, driven by large concurrent global production outages and big-ticket tenders seeking more than 40 cargoes for July-September.
The market was not fully out of the woods as Malaysia's giant Bintulu complex may have shut in some production for planned maintenance, traders said. The 30-million-tonne-per-annum, nine-train facility spent last month troubleshooting unexpected electrical faults that impeded output.
Angola LNG planned to shut this month ahead of an early August restart. Australia's Ichthys project, meanwhile, fell further behind schedule, delaying first LNG as developer Inpex patched what it called "minor issues".
On a more positive note, Cheniere Energy's Corpus Christi project in Texas got the green light this week to introduce gas into the facility, raising the prospect of test LNG exports later this year.
The second train from Yamal LNG in Russia's Arctic should start pumping in September. The fifth train from Cheniere's Sabine Pass plant in Louisiana starts the following month.
A spell of hot weather in Japan led Kansai Electric to buy this week but demand for August and September was still limited there, though Chinese consumption was brisk, in part driven by new government policy mandating that domestic importers boost storage capacity.
New rules ask gas suppliers to hold at least 5 percent of imports in storage by 2020, a policy that may be hastening buying demand at Chinese terminals, a trader said.
Still, burgeoning supply proved decisive.
Nigeria LNG offered three July cargoes as its fifth production unit resumes this month, AP LNG in Australia, Abu Dhabi and Angola had spare July shipments, plus Pakistan's decision to scrap its tender was also expected to release Egyptian supply into spot markets.
In its tender, Pakistan LNG received offers from Vitol and Gunvor in the 15.7-17.1 percent of Brent range, but a sharp downturn in prices subsequently means spot prices are now closer to 13 percent in Brent terms.
The prospect of paying such steep premiums as monsoon rains lowered cooling demand led Pakistan to cancel its tender.
A promising outlet for Pakistan's cancelled cargoes could be India where India Oil Corp and Bharat Petroleum have shown demand.
In Europe, LNG terminal inventories saw a minor decline in aggregate but remained robust, and in certain markets such as Britain, the Netherlands and parts of France stocks had risen.
It suggests further supply availability, for potential reloads, a further bearish factor.
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