GLOBAL LNG-Asian prices edge higher on Indian demand, Mideast tensions
SINGAPORE (Reuters) - Asian spot prices for liquefied natural gas (LNG) for cargoes delivered in February rose slightly, amid spot demand from India and tensions in the Middle East.
The average LNG price for February delivery into northeast Asia <LNG-AS> is estimated to be about $5.30 per million British thermal units (mmBtu), up 15 cents from the previous week, several industry sources said.
The price for cargoes delivered in March is estimated to be about $4.75 per mmBtu, they said.
Indian companies have been seeking cargoes for delivery in February and March, sources said.
Bharat Petroleum Corp Ltd was seeking a cargo for delivery into Dahej on Feb. 19 while Indian Oil Corp was seeking several cargoes for delivery in February and March through separate tenders, they added.
Gail (India) was also looking for a cargo for delivery in February, and separately sold a cargo for loading in March from Sabine Pass LNG plant in the United States and bought a cargo for delivery into Dahej or Dabhol in early February through a swap tender, they said.
India's GSPC may have bought a cargo for delivery over late January to February at around $5 per mmBtu, one of the sources said, though this could not immediately be confirmed.
Geopolitical risks also supported prices. Payments known as war risk premiums for tankers shuttling through the Strait of Hormuz could rise significantly, adding hundreds of thousands of dollars to shipping costs, after Iran's retaliatory strikes this week on Iraqi bases that house U.S. forces.
China imported a record high monthly volume of LNG in December, overtaking Japan as the world's top importer of the fuel for a second consecutive month, ship tracking data from Refinitiv Eikon showed.
But the surge in Chinese imports are due to the arrival of term volumes buyers committed to previously and spot volumes purchased earlier in the year, rather than a sudden rise in domestic demand, traders said.
The rise in spot price was capped by exports from Angola and Brunei.
Brunei's export plant offered a cargo for delivery in March, while Angola's project offered a cargo for delivery over late January to early February to as far as Singapore, sources said.
Traders expect spot prices to drop to below $5 per mmBtu once winter demand eases.
Editorial Comment: The Future of FLNG: Less is More?
Global LNG export capacity is expected to increase by 45% between 2017 and 2022, to more than 400 metric MMtpy, with 90% of the new capacity coming from sanctioned projects in the U.S. and Australia. By 2050, this capacity is anticipated to exceed 700 MMtpy. Regasification capacity is anticipated to increase even more sharply.
Executive Viewpoint: Back to production: Where we’re going, we don’t need pipelines
What if a cost-effective way existed to extract and distribute natural gas, regardless of proximity to pipeline, and bring those assets back to production? What if the industry went in a direction that did not need pipelines? For those looking to monetize unproductive natural gas assets or bring unproductive wells back to production, it would be revolutionary.
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Australia is planning further increases in LNG production and exports over the next decade, despite quickly depleting reserves and a looming supply shortage in the domestic market.
GasPro 2.0: A Webcast Symposium
Following on the heels of the highly successful GasPro 2.0 Webcast Symposium in October 2018, the second GasPro Webcast Symposium 2.0 will take place on October 24, 2019.
The 2019 web event will gather experts in the fields of LNG, gas processing, and gas transport/distribution to share their operations expertise, engineering and design solutions, and technology advances and trends with our audience.
Attendees will learn about technology and operational solutions and deployments in a number of areas: plant design and expansion, construction, NGL production, optimization, sulfur removal, marine operations and separation technology.
October 24, 2019 08:30 AM CDT