GLOBAL LNG-Asian spot prices drop, outlooks for winter get bearish

05 Jul, 2019

The price for delivery of LNG in northeast Asia in August is estimated at $4.30 per million British thermal units (mmBtu), a 50 cent drop from last week.

LNG traders said demand from key buyers in Asia is likely to stay thin, with some market sources decreasing their price expectation for the upcoming winter to as low as between $6.50-$7.50/mmBtu from earlier forecast of above $8.00/mmBtu.

Asian price netbacks for Atlantic produced cargoes have remained above those in Europe this week, but a lack of physical cargo demand means cargoes often cannot be sold to higher-priced markets.

"Numbers may work on paper, but in practice sellers struggle to find a buyer," an LNG trader said.

In the past week, projects in Angola, Australia, the UAE and Papua New Guinea were among those that issued spot sell tenders.

Angola LNG export project was selling a cargo for August delivery, a second August cargo in one week.

Two cargoes were offered from Exxon Mobil Corp's Papua New Guinea liquefied natural gas (LNG) export plant.

An August cargo from the project was sold earlier this week at $4.5 per mmBtu and a September cargo at $4.55 per mmBtu, a market source said.

In Australia, the Ichthys project offered two cargoes, one for late July and another for early August loading.

One cargo was also offered from Australia's Wheatstone plant, which was bid at around $4.55 per mmBtu, the source added.

UAE's Adnoc was selling an early August cargo from its Das Island facility.

India's Gail offered two LNG cargoes for loading from the Cove Point plant in the United States in August and November and was also seeking an LNG cargo for India's Dahej terminal for late December delivery.

India's GSPC cancelled a buy tender for August delivery, but was expected to return to the market for the cargo later.

The trading arm of Thailand's PTT bought a cargo from US producer Cheniere for a likely delivery to Europe in August.

Supply from the United States is growing.

Cheniere said this week that it had produced first cargo from its new Corpus Christi Train 2.

Feedgas into the newly launched Cameron LNG plant in Lousiana has been consistently high since the start of July.

One of its offtakers, Japan's Mitsui is expected to load another cargo there on the Marvel Crane tanker that delivered first cargo from the plant to France last month.

The vessel was first expected to reload a cargo in the Netherlands but is now heading to Cameron instead.

European gas prices gained value this week as a number of unplanned outages on Norwegian gas production has reduced supply.

Dutch gas price for August delivery increased by more than 50 cents to around $3.65 per mmBtu.

Copyright Reuters, 2019

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