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GLOBAL LNG-Gorgon production outage, tenders lift spot prices

Published 12/11/2016, 04:37 am
Updated 12/11/2016, 04:40 am
GLOBAL LNG-Gorgon production outage, tenders lift spot prices
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* Gorgon LNG output may have restarted Friday-source

* India, Mexico tenders support demand

* Angola liquefaction plant restarts with tender launch

* Egypt draws interest; credit risks push traders to fore

By Oleg Vukmanovic

MILAN, Nov 11 (Reuters) - Asian spot liquefied natural gas (LNG) prices rose this week as production at the giant Gorgon facility in Australia was shut briefly and as scattered pockets of demand emerged.

The price of LNG for December delivery was 10 cents higher at $7.30 per million British thermal units (mmBtu) this week, with January fetching a 10 cent premium to December.

UK December gas TRGBNBPMZ6 declined two percent during the week, potentially capping Asian gains, while traders worked to manoeuvre cargoes from north-west European terminals to Asia as regional price spreads widened.

Chevron's $54 billion Gorgon plant was shut as part of a brief unplanned outage that has delayed a handful of shipments but avoided cancellations, several trade sources said.

It marks the project's third shutdown since it started up in March, limiting its output at a time of relatively low spot LNG prices.

Chevron (NYSE:CVX) did not immediately return requests for comment.

A trader briefed by a project shareholder said the plant was due to resume output just days after being taken offline, while a second source said it was due to restart on Friday, but could not confirm whether it had.

He said the shutdown was caused by work on the acid removal unit - which Chevron had blamed in June for triggering a lengthy plant shutdown following a gas leak. five cargoes were delayed for a couple of days but none were cancelled," the trader said.

PetroChina is to export its first LNG from Cheniere Energy's Sabine Pass plant on the U.S. Gulf Coast on Nov. 14, using the Wilpride tanker.

Meanwhile, Gail India launched a buy tender to secure two cargoes for delivery in January-February with bids due on Nov. 17. The bidding deadline for a December delivery Gail sought expired on Thursday, a trader said, though it is unclear if that tender was awarded.

Mexico is seeking to take a cargo in early December. was slow to surface about a sell tender by Russia's Sakhalin II, which is offering multiple cargoes. Some trade sources said it could be difficult to confirm the details as only the plant's existing customers were eligible to bid.

Angola LNG took traders off guard by returning earlier than expected from a maintenance outage that began in late October.

It is offering a shipment loading on Nov. 15-17 with bids due by Nov. 16. over Egypt's worsening credit outlook are pushing risk-averse producers to strike up alliances with trading houses in a bid to still participate in Egypt's bumper 96-cargo tender while reducing the risks. Participation in the tender was still high though,

Trade houses such as Trafigura, Glencore (LON:GLEN), Vitol and newcomers such as Oman Trading International and B.B. Energy, among others, are said to be poised to benefit from producers' reluctance to take direct exposure, traders said.

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