Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC

Asian LNG price drops as floating storage starts unloading


LONDON, Nov 1 (Reuters) - Asian spot prices for liquefied natural gas (LNG) slumped this week as floating storage cargoes started unloading into an already oversupplied market.


The average LNG price for December delivery into northeast Asia <LNG-AS> was estimated at $5.90 per million British thermal units (mmBtu), $0.40/mmbtu down from last week.


Vessels floating with cargoes on board waiting for a higher price have started discharging, with most of the volumes expected to be unloaded this month.


This could further pressure prices, traders said.


"The November-December spread is not as wide as the spread between November and previous months was, so it doesn't make sense to hold cargoes for longer," one LNG trader said.


Floating cargoes were unloaded this week in Greece, Poland, Spain, the Netherlands, India and Japan.


Some of the longest floaters are heading to terminals for unloading now. The Diamond Gas Sakura that loaded a U.S. cargo back in mid-August signalled Taiwan's Yongan as its destination this week.


The majority of the still floating cargoes is scheduled to reach various terminals in early November, while at least nine vessels are either not moving or do not have a confirmed destination yet.






At least two deals were done this week below or close to $6/mmBtu, an LNG trader said. Russia's Sakhalin 2 project awarded a Dec. 11 loading cargo below $6/mmBtu, the source said. The cargo was offered on a free-on-board (FOB) basis.


Japan's Tohoku Electric Power bought a late December cargo just below $6/mmBtu, the source added.


There was a deal for end December at S&P Global Platts market on Close (MOC) window at $6.10/mmBtu between Vitol and BP. The majority of bids in the window for December were below $6/mmBtu this week.


Poland's state-run gas firm PGNiG has awarded its tender for five cargoes at a $0.10-0.15/mmBtu discount to the Dutch gas benchmark, a source said. The cargoes are for delivery in the first quarter 2020.


JERA Global Markets has awarded its tender for the first quarter 2020 delivery at a $0.10-0.15/mmBtu discount to the Japan Korea Marker (JKM), another source said. Five of eight cargoes were awarded to Shell, BP and Mitsui, a separate source said.






Spot LNG demand remained scarce this week.


Korea Gas Corporation (KOGAS) is facing a situation of full LNG storages, a source said. KOGAS might have bought up to 15 cargoes for January and February delivery, two trade sources said last week.


Growth of LNG demand in China in 2019 is expected to slow to 14%-17% from 41%-42% in 2018, according to analysts from Wood Mackenzie and IHS Markit.


But the domestic gas price in China is higher than the spot LNG price, so there could be some opportunistic buying, traders said.


In terms of tenders, Mexican state power utility CFE was seeking one cargo for mid-November delivery.


Turkish state energy company Botas issued a tender closing on Nov. 8 to buy 70 LNG cargoes for delivery over 2020-2023. . (Reporting by Ekaterina Kravtsova, additional reporting by Jessica Jaganathan in SINGAPORE; Editing by Emelia Sithole-Matarise)


Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo


Business Trends: China pushes shale gas drilling amid corporate shakeups
-Adrienne Blume
In what appears to be a move to increase domestic energy production and self-reliance, as well as boost competition among foreign companies, China is reorganizing its state-owned energy firms and widening the invitation to shale gas drillers.
Editorial Comment: A brighter future for methane hydrates?
-Adrienne Blume
Methane hydrates are three-dimensional ice-lattice structures in which natural gas is trapped.
Executive Viewpoint: Innovative DCS targets biogas, LNG applications
-Jani Hautaluoma
New technologies, both process and digital, are revitalizing the hydrocarbon processing industry. Gas Processing & LNG talked with Jani Hautaluoma, Director of Process Automation for Valmet Automation, about the application of new production processes and digital advances for biogas and LNG production.

Best Practices in Supporting Front Line HPI Operations Remotely in Response to Covid-19

Register Now

To ensure employee safety, HPI companies had to quickly pivot to a remote support model with many subject matter experts (SMEs) and engineering staff working remotely supporting front line, sequestered critical operations and field operators.

What are the best practices and lessons learned from this new remote operational support model? What have been technologies and work processes that are enabling effective and efficient remote operational support? Is this the “new norm” going forward even when the impact of Covid-19 abates? If not, how will remote support of critical operations be changed?

If this topic and questions are of interest to you and your organization, please attend this special HPI webinar with a panel of leading industry customer experts who will discuss their perspectives. Attendees will have the opportunity to ask questions for the panelists.

May 18, 2020 10:00 AM CDT

Register Now


Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2020 Gulf Publishing Holdings LLC.