MILAN/LONDON: Asian spot liquefied natural gas prices for March delivery fell nearly 10 percent this week as a burst of supply offered by Nigeria and Australia, mild weather and weak demand drove losses.
The price of spot LNG fell to $9 per million British thermal units (mmBtu) on Friday, compared with $9.90 per mmBtu last week.
Australia's North West Shelf project wants to sell at least five cargoes from April, which comes on top of the three cargoes it offered to the market last week.
NWS awarded those three cargoes on Friday, traders said. Among the winners was a European trading house and a Japanese utility, some traders said.
Nigeria, which sold a spot cargo to Shell this week, notified the market on Thursday it had an extra cargo available in February.
Trinidad may also be readying a tender to sell cargoes in February, a shipping source said.
"You have continuing tenders, obviously North West Shelf is going at it hammer and tongs, there's also a Sakhalin tender and Papua New Guinea has a couple of cargoes it needs to get rid of as well," one trader said. Supplies should improve as BG Group's new Queensland Curtis liquefaction plant in Australia ramps up exports, followed later in the year by the start-up of three other Australian projects.
Traders said BG Group had dispatched a tanker to export its third cargo from the Queensland plant.
Mexico's CFE tender to buy 13 cargoes from February to November has drawn great interest, with winning bids expected to see only a marginal premium to Asian prices.
Deepening backwardation, a market structure wherein LNG gets cheaper further out in time, is encouraging buyers to use up stored supply and defer purchases, keeping a lid on demand.
April prices are estimated at $8 per mmBtu.
In Spain, three deals for re-exporting LNG cargoes are being negotiated, but buyers and sellers remain far apart on price.
South Korea's Posco has purchased a single cargo from a trading house or mid-sized oil major, traders said.
In Nigeria, Excelerate's Excellence tanker is en route to help refloat a Vitol cargo trapped aboard the Magellan Spirit vessel, which ran aground in soft mud off the Bonny Island LNG export plant last week.
Excelerate's tanker will siphon some cargo from the Magellan Spirit, lightening its load enough to refloat the vessel in high tide.
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