GLOBAL LNG-Prices slide in well-supplied and quiet market
LONDON, (Reuters) - Asian spot prices for liquefied natural gas (LNG) fell this week although few cargoes were heard to swap hands in a well-supplied market with some traders still on their New Year’s break.
Spot prices for February delivery to Asia LNG-AS were assessed at $8.75 per million British thermal units (mmBtu) compared to $9.10 last week, industry sources said, citing low liquidity as the reason for the fall.
Trading activity started to rise towards the end of the week and was mainly focused on late January and February cargoes, with nothing yet heard for March volumes, traders said. Tumbling shipping charter rates, however, were expected to boost liquidity next week, they said.
Demand stayed low, with two buy tenders issued.
Pakistan sought five cargos for delivery over March to April, with offers due by Jan. 30, according to documents. It is only its second LNG tender since June.
Mexico’s CFE sought five cargoes to be delivered to its Manzanillo terminal between February and April in a tender due by Monday, traders said. CFE also purchased a cargo in a tender for mid-January delivery.
China’s Unipec will load a cargo from Australia in February, having arranged a spot vessel for that shipment.
On the supply side, a number of cargoes in Southeast Asia and the Middle East have been offered.
Kuwait Foreign Petroleum Exploration Co (KUFPEC) will close on Monday a tender for mid-February loading from the Wheatstone plant in Australia. Exxon closed a tender for a spot vessel to load February volumes from Australia’s Gorgon plant.
Malaysia’s Petronas sold at least two January cargoes from the Bintulu plant, with prices at around $8.50-$8.70/mmBtu free-on-board (FOB).
A spot FOB cargo is being marketed from Qatar’s Ras Lafan plant for mid-January loading.
Gunvor will lift a spot cargo from Oman’s Qalhat plant this month, having chartered the Gaslog Singapore for the loading. Gunvor has also chartered the Flex Rainbow, which it will likely use to load a U.S. cargo, sources said.
LNG delivery volumes into Northeast Asia accelerated in December, exceeding 20 million tonnes and setting a new record, Refinitiv Eikon data showed.
Deliveries into China, Japan, South Korea and Taiwan are set to be robust in January with 7.4 million tonnes, or 114 cargoes, already scheduled to arrive, according to the data.
Lower shipping rates are aiding flows into the region, industry sources said, although the flow of Atlantic cargoes to the Far East is unlikely to resume soon, with closed arbitrage.
Spot charter rates for a vessel with modern propulsion dropped to about $80,000 to $85,000 per day this week from $110,000 to $120,000 the previous week and could fall further as more vessels are becoming available.
Seven ships were open for a spot charter, which could grow to 10 by the end of next week, shipbrokers said. (Reporting by Sabina Zawadzki and Ekaterina Kravstova; Editing by Dale Hudson)
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The global LNG industry is becoming increasingly interconnected as grassroots export projects get off the ground. Another technology route for processing gas into fuels—GTL—is attracting renewed attention due to improving economics. Small-scale solutions for both LNG and GTL are at the forefront of new technological developments, while major projects using more conventional technologies continue to start up around the world.
During this webcast, we will focus on LNG, GTL, gas processing technology developments and deployments, operations, small-scale solutions, transportation, trading, distribution, safety, regulatory affairs, business analysis and more.
October 25, 2018 08:30 AM CDT