LNG prices stabilize, but demand still firm for winter

9/17/2021

Asian LNG prices rose to new seasonal highs earlier this week on the back of record high natural gas prices in Europe, but prices tapered off slightly, industry sources said.

The average LNG price for November delivery into Northeast Asia was estimated at about $24 to $25 per metric million British thermal units (mmBtu), up at least $3 from the previous week, industry sources said.

Prices for cargoes delivered in October are estimated to be at $22 to $23, about $1.90 to $2.90 up from the previous week, they added.

Earlier in the week, a spot cargo exchanged hands at about $29 per mmBtu, one source said, adding that Japan's Tohoku Electric was the likely buyer. This is the highest priced cargo in the spot market since earlier this year, a second source said.

"Fundamentally, the demand is still there as utilities and other buyers need to stock up for winter, but with prices rising so much, there is some profit-taking happening in derivatives which is spilling over to the physical market," a Singapore-based trader said.

Despite the higher prices, there was still demand, with Bangladesh and Jordan's NEPCO seeking a cargo each for delivery in October, sources said.

Papua New Guinea is likely to have sold a cargo for delivery over late October to November at about $26 on a free-on-board (FOB) basis, while China National Offshore Oil Co (CNOOC) is likely to have sold a cargo loading from Australia's Northwest Shelf, though price details could not immediately be confirmed.

GAIL (India) is likely to have awarded a swap tender and bought two cargoes for delivery into India in November and December at about $22 to $23 per mmBtu, one source said.

Malaysia's Petronas has notified some buyers in Japan that it may delay cargo deliveries, though further details could not be confirmed.

Thailand's EGAT is also seeking two cargoes for delivery in October and early November through a tender, they added.