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GLOBAL LNG-Asian LNG price drops for 4th week, abundant supplies to weigh further

Published 16/11/2019, 03:29 am
© Reuters.  GLOBAL LNG-Asian LNG price drops for 4th week, abundant supplies to weigh further
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* Unusually warm temperatures in key Asian markets

* Busy LNG delivery schedule in Europe

* European gas storage sites full

By Ekaterina Kravtsova

LONDON, Nov 15 (Reuters) - Asian spot prices for liquefied natural gas (LNG) fell for the fourth week in a row on Friday, with traders expecting a further slide due to abundant supplies, full inventories and mild weather.

The average LNG price for December delivery into northeast Asia LNG-AS was estimated at $5.40 per million British thermal units (mmBtu), $0.30/mmbtu down from last week.

The January delivery price is around $5.90/mmBtu, market sources said.

"Clearly there is no buying demand on the market. All inventories across the world are high, production is strong and the weather seems to be very mild," one LNG trader said.

Unusually warm winter temperatures are forecast across key Asia markets, including Japan and China, the world's top LNG importers. busy schedule of LNG deliveries to Europe, where storage facilities are already full, is also driven spot gas prices to almost half their levels they were a year ago. is not a single argument at the moment to believe that the LNG market will become bullish," the LNG trader said.

SPOT DEALS

In terms of spot market activity, Russia's Sakhalin 2 plant has sold an LNG cargo for loading in January at about $6.40 to $6.45 per mmBtu to Diamond Gas International. YPF SA YPFD.BA has sold its first commercial LNG cargo to Petroleo Brasileiro SA (Petrobras) PETR4.SA , the Brazilian state energy firm told Reuters. Corp 1605.T , operator of Australia's Ichthys LNG plant, sold a cargo for loading in December on a free-on-board basis at about $4.50 per mmBtu. CPC bought a late December cargo at $5.50 per mmBtu, one source said.

In northwest Europe, December delivery deals were done at a $0.40-0.45/mmBtu discount to the Dutch gas price, a trader said.

Mexico's CFE closed its buy tender for two December cargoes, while Thailand's Egat closed its buy tender for December and April cargoes.

Pakistan LNG issued on Friday a tender to buy a February delivery cargo. LNG offered a cargo for December delivery in a tender closing on Nov. 19, sources said. more cargo was offered from Angola for early January delivery in a tender closing on Nov. 21, one trader added.

LONG-TERM ACTIVITY

There are several buy and sell tenders on the market for term cargoes.

On the supply side, Oman LNG offered 52 LNG cargoes for export over 2021 to 2025.

On the buy side, Turkey's state energy company Botas was expected to award its 70-cargo tender for 2020-2023 delivery.

Essar Steel India ESRG.UL closed a tender for 36 LNG cargoes for 2021-2023 delivery on Friday.

Taiwan's CPC closed a tender earlier in the week for 12 cargoes for 2020 delivery.

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