By Oleg Vukmanovic
MILAN, March 24 (Reuters) - Asian spot LNG prices fell this week on poor demand from major gas-consuming regions despite a slew of new purchase tenders.
The May spot LNG contract fell by $0.25 cents to $5.40 per million British thermal units (mmBtu), with new production coming on stream in Australia and the United States.
Analysts and traders mainly blamed low demand for driving prices lower. In the Middle East, Abu Dhabi was staying on the sidelines of the market and new solar power capacity in Dubai was eroding gas demand there.
In Asia, imports by India, Argentina and China has lagged 2016 levels and South Korea needs less gas because of its new coal power plants.
"Supply continues to push on the upside of expectations," said one analyst, citing a third LNG production train due to start this week at Australia's Gorgon project, new U.S. output and Algeria's plans to lift exports in this year.
On the tender supply side, Angola, Russia's Sakhalin II and some Australian producers were offering volumes. AP LNG project offered three cargoes spaced out over several months but had only sold one while holding back the rest because of low prices, two traders said.
Cargoes loading from the North West Shelf project in Australia were halted due to poor weather. the demand side, Mexico's CFE purchased two April cargoes from Cheniere Energy in a tender, one trader said, adding the price was slightly below $5 per mmBtu, probably because Cheniere was supplying test cargoes from its latest production line.
The U.S. Federal Regulatory Commission granted Cheniere's application to start long-term production at its new line, known as Train 3. But the train, which was already producing LNG, unexpectedly shut on Wednesday. May gas contract at the UK hub is currently trading at $4.87 per mmBtu. Traders said they did not believe the CFE purchase had dipped below that level.
Kuwait Petroleum Corp is seeking a May cargo, India's GSPC a late April or early May cargo and Gail India a first-half April cargo. Jordan closed a tender for a May cargo. These buyers and India's Petronet closed or awarded their tenders this week.
Fresh demand was expected to emerge from Argentina where state-run Enarsa was readying to launch a tender by the end of the month, likely seeking between 10-20 cargoes for delivery in August and the months after, two trade sources said.
India's Torrent Power TOPO.NS has given notice to potential liquefied natural gas (LNG) suppliers it wants to buy nine cargoes for delivery in 2018, according to a document posted on its website.