LONDON/SINGAPORE: Asian spot LNG prices fell this week as buyers in Japan facing brimming stocks backed off from additional purchases, overlooking production setbacks in the United States.
As Cheniere Energy took offline Train 3 at its Sabine Pass export facility, supplies to Korea Gas Corp - the off-taker of volumes from the train - showed no sign of being impacted, traders said, confirming assurances from a Cheniere spokesman.
Traders speculated the train could be out of action for anywhere between three weeks to six months.
Hurricane Harvey intensified into potentially the most powerful storm to hit the US mainland in more than a decade, set to make landfall on Friday or early Saturday, slamming into Corpus Christi first.
Cheniere's Sabine Pass LNG plant is further up the coast but a spokesman said the hurricane had so far not impacted production.
Instead, new supply from Algeria, Russia, Australia, Indonesia and Malaysia coupled with Japanese utilities taking steps to swap out supply snapped a six-week run of price gains.
Spot prices for October delivery fell 25 cents to $6.05 per million British thermal units (mmBtu).
In Japan, Kyushu Electric took the unusual step of selling a cargo for early September and buying a shipment reloaded from South Korea for later that month, traders said.
Following a warmer-than-average July, Japanese utilities spent August replenishing stock levels at terminal storage tanks.
"Demand is poor and storage is high in Japan right now and it looks to me as if these moves by Kyushu are an attempt to reshuffle supply," a source said.
Kyushu Electric is also an off-taker from the Wheatstone LNG project which is set to ship its first cargo in the first week of September.
Buyers' reticence may be reinforced by a desire to see prices fall as far as possible before importers must restock winter stores.
Algeria's state-run Sonatrach is looking to sell up to two liquefied natural gas (LNG) cargoes loading in mid-September, according to trade sources.
The producer likely already sold one of the shipments, a trade source said, and is speculatively offering a second consignment loading around the same time.
"This summer it has become quite normal for Algeria to offer two to three cargoes for sale per month," he added.
Meanwhile, Russia's Sakhalin II plant launched a tender to sell one cargo loading at the end of October and another in early November.
Exxon Mobil's tender to sell a September-delivery cargo from Australia's Gorgon project was to be awarded on Friday.
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