GLOBAL LNG-Asia spot steady at 3-year high on outages, tender…

by Cassandra Collier
Published: January 21, 2023 (1 week ago)

By Oleg Vukmanovic

LONDON, Nov 24 (Reuters) – Asian spot liquefied natural gas (LNG) prices held steady near three-year highs this week as production problems in Indonesia, higher oil and European gas benchmarks and tender awards lent support.

Spot prices <LNG-AS> for January delivery were unchanged at $9.85 per million British thermal units (mmBtu).

Renewed Indian demand for spot cargoes in January and beyond helped buoy markets even as traders assessed that the two biggest buyers, South Korea and Japan, may keep a low profile for the rest of winter, barring unseasonably cold weather.

Korea Gas Corp is estimated to have recently purchased 10 cargoes to cover the remainder of its winter needs and Japanese importers showed few signs of topping up stocks for now.

It is possible that technical faults affecting Indonesia’s giant Bontang export facility – triggering the loss of up to 7 cargoes, or 20 percent of monthly output – may push Japanese off-takers to seek alternative supply.

There was no sign yet of this happening, with some sources saying Bontang was discussing with suppliers to reschedule deliveries.

Exxon Mobil evacuated non-essential staff working in the highlands of Papua New Guinea due to unrest in the area but there have been no signs of LNG export disruptions as yet.

“Beyond India, buyers are pretty shy about showing their requirements,” a trader said, due to wariness about triggering further price gains.

India’s Bharat Petroleum came out this week with two tenders seeking a spot cargo in January and three more spread across May, August and October.

Gujarat State Petroleum Corp sought a delivery in the second half of December.

Coal stockpiles across India remain precariously low, adding to pressure for price-sensitive importers to continue buying LNG, despite the fact spot prices hold premiums to long-term, oil-linked contract levels.

Chinese buying has been a key ingredient in the months-long Asian rally, though the extent of residual spot winter demand remains uncertain.

PetroChina’s terminal in east China is expected to receive 31 shipments this winter through March, with volumes up 21 percent from a year ago.

China’s October imports were the second-highest on record.

Further support came from rising Brent crude oil, up nearly four percent from a week ago to $63.63 a barrel, and January gas at Britain’s gas trading hub, which rose nine percent during the period.

Additionally, Russia’s Sakhalin-II liquefaction plant sold two cargos via tender for January loading at prices estimated to be around $9.85 per mmBtu, traders said.

It was not immediately possible to confirm the identities of the buyers.

On the supply side, Angola LNG put up Nov.

28-30 loading cargo for sale via tender on Friday.

France’s Engie was assessing potential for a reload from Britain’s Isle of Grain terminal or France’s Montoir in December, holding vessel charter talks.

December demand from Turkey was reported by traders.

In Italy, Dufenergy Trading won a tender to supply the OLT floating import terminal offshore Toscana in December.

Further forward, Pakistan LNG continued with its pattern of locking-in supply for the spare capacity of its second terminal, the BW Integrity, due to begin operations this month or in December.

The terminal received its first cool-down, or commissioning cargo, from trader Gunvor using the Golar Kelvin tanker.

On Friday, Pakistan LNG put out a call for four March cargoes.

The Golar Winter floating storage and regasification unit (FSRU) took on a small cool-down cargo at Spain’s Mugardos terminal on Oct.

22 and currently appears to be heading back to Brazil, where is serves as an import terminal.

(Reporting by Oleg Vukmanovic; Editing by Jane Merriman)

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