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Global LNG-Prices slip on slack demand from key importers

Published 21/08/2015, 11:05 pm
© Reuters.  Global LNG-Prices slip on slack demand from key importers
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* Egypt seeking cargoes via Jordan

* Japan July imports down 11.3 pct

By Sarah McFarlane and Oleg Vukmanovic

LONDON/MILAN Aug 21 (Reuters) - Asian liquefied natural gas (LNG) prices for October delivery eased this week with traders citing slack demand in mature markets including Japan and South Korea, though demand from India and some newer markets helped to stem losses.

Traders said that pricing is varied over October because of differing cargo qualities on offer from Australia, where some projects are selling more lean LNG.

The price of Asian spot cargoes eased to about $7.90 per million British thermal units (mmBtu), down from around $8 last week.

"India is probably where we see a few extra cargoes being placed," one broker said. "If there is somebody buying, it's India, as well as Egypt and Jordan, who are constantly buying. The Middle East in general, Kuwait and Argentina also have some demand."

Egypt has approached existing suppliers of LNG, seeking four cargoes for delivery to Jordan's Aqaba gas terminal before being piped to Egypt. ID:nL5N10W100

Traders said that Egypt may need to import more LNG via Jordan in the coming months because its existing floating storage and regasification unit (FSRU) is not expected to be able to meet its demand alone.

Trafigura and BG Group (LONDON:BG) will each deliver a cargo to Jordan in October after a recent tender, trade sources said. ID:nL5N10W1YP

Japan, the world's top buyer of LNG, imported 6.95 million tonnes in July, down 11.3 percent from a year earlier.

"Nuclear start-ups in Japan are a bit of a concern and, of course, power demand in Japan hasn't been great," the broker said.

Kyushu Electric last week began the restart of the Sendai plant, the first of Japan's nuclear reactors to begin operation under new safety standards introduced since the 2011 Fukushima disaster. However, the ramp-up of power output from its Sendai No.1 reactor was halted because of a cooling system problem. ID:nL3N10W1I8

On the supply side, Abu Dhabi state-run energy company Adgas has tendered to sell one LNG cargo loading in September, while Trinidad is offering to sell a single cargo loading on Sept. 23 via marketing arm Trinling Limited. ID:nL5N10W1ST

Shell's RDSa.L force majeure on gas supplies to Nigeria's LNG export terminal at Bonny Island continued to be monitored by traders. ID:nL5N10H3H7

"They may not produce any extra cargoes for the tender market during this period," the broker said.

One trader said that Nigeria's loadings were being delayed by three to four days by the pipeline issue.

New supply from Australia continued to weigh on prices. The Gladstone LNG production plant coming on stream in September is expected to offer up to six commissioning cargoes for sale between October and December early next week. ID:nL5N10W21H

(Editing by David Goodman)

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