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GLOBAL LNG-Asian LNG price dips as spot supply floods market

Published 30/11/2019, 03:10 am
© Reuters.  GLOBAL LNG-Asian LNG price dips as spot supply floods market
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* Spot supply offers keep coming on the market

* Buying demand remains quiet

* Limited impact of South Korea's coal plant closures for now

By Ekaterina Kravtsova

LONDON, Nov 29 (Reuters) - Asian spot prices for liquefied natural gas (LNG) slipped this week as new supply offers kept coming on the market amid subdued demand.

The average LNG price for January delivery into northeast Asia LNG-AS was estimated at around $5.60 per million British thermal units (mmBtu), $0.10/mmbtu down from last week.

Buying activity was limited in both Asia and Europe as gas stocks were high, market sources said. But supply offers were ample.

"It's a slow grind down," one LNG trader said. "At the moment, I don't see a reason for prices to start rising in December."

Two of Australia's projects were selling strips of cargoes.

Australia Pacific LNG (APLNG) has offered one cargo a month for loading over 2020. LNG plant has offered five cargoes for loading between December and April. producer Woodside Energy was selling a late December cargo from Pluto LNG, a source said.

Another Australian project, Gorgon, was expected to end its planned maintenance on one of its trains on Friday after a production reduction for more than a month.

Nigeria LNG closed a tender for two December cargoes, while Russia's Novatek might have offered up to four cargoes on the spot market, sources said.

On the demand side, an announcement of South Korea's energy ministry that the country will idle up to a quarter of its coal-fired power plants between December and February did not prevent prices from falling. impact of the closure is expected to be limited at the moment as Korea Gas Corporation (KOGAS) 036460.KS has purchased over a dozen cargoes for winter supply earlier this autumn. However, future winter purchases will depend on the weather, an industry source said.

Some demand came from Mexico where state power utility CFE was looking for five cargoes for delivery during January and February. Gujarat State Petroleum Corp (GSPC) was seeking a late December cargo, while Reliance Industries has bought a cargo for the first half of January delivery, market sources said.

Pakistan LNG announced that commodity trader Gunvor GGL.UL submitted the lowest bids for four out of five cargoes for delivery in January. The remaining cargo will be supplied by DXT Commodities. Europe, several deals were done for delivery from end December to early February at discounts over $0.40 per mmBtu to the Dutch gas benchmark, an LNG trader said.

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