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GLOBAL LNG-Asian prices hit three-week high; tanker rates rise

Published 11/10/2019, 09:45 pm
Updated 11/10/2019, 09:50 pm
© Reuters.  GLOBAL LNG-Asian prices hit three-week high; tanker rates rise

* CNOOC seeks to charter ships to replace COSCO-linked tankers

* Japan's Tohoku buys November-delivery cargo - sources

* China's LNG imports could slow due to terminal repairs

By Jessica Jaganathan

SINGAPORE, Oct 11 (Reuters) - Asian spot prices for liquefied natural gas (LNG) rose to a three-week high this week ahead of winter demand, while tanker rates nearly doubled on limited availability of vessels.

Spot prices for November-delivery to Northeast Asia LNG-AS are estimated to be about $5.80 per million British thermal units (mmBtu), up by 25 cents from last week, said several sources who are market participants.

Prices for December delivery are estimated to be about $6.45 per mmBtu, they added.

Higher oil prices and shipping rates, which have nearly doubled in a week could boost spot LNG prices further, sources added.

LNG tanker rates rose after China National Offshore Oil and Gas Company (CNOOC) sought tankers to charter looking to replace ships it had previously hired that are linked to a Chinese company sanctioned by the United States for allegedly transporting Iranian oil, they added. industry sources said CNOOC is seeking to replace some of six COSCO-linked LNG tankers - Dapeng Sun, Dapeng Moon, Dapeng Star, Min Rong, Min Lu and Shen Hai.

Still, apart from a few spot cargoes, demand from North Asia is yet to increase for winter, trade sources said.

In the spot cargo market, Japan's Tohoku Electric Power 9505.T bought a cargo for November delivery from a trader at $5.80 per mmBtu, industry sources said, though this could not immediately be confirmed.

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"Demand in Japan is low. I think it is only Tohoku who purchases spot cargoes constantly," a Japan-based trader said.

Essar Steel India ESRG.UL is yet to award a tender seeking 12 cargoes for 2020 delivery, a company spokesman told Reuters.

China's LNG imports are expected to slow as repairs to the Rudong LNG import terminal is only likely to be done by mid-November after an accident last month, two company sources said. Energy, which operates PetroChina's LNG receiving terminals, cut intake capacity at Rudong LNG terminal since Sept. 21 when a tanker collided into a bridge that connects the island where the terminal is located to the mainland during a typhoon.

PetroChina's trading unit Chinaoil is diverting some of the LNG meant for the Rudong terminal to its two other receiving terminals in Tangshan and Dalian, one of the company sources said. The company also offered spot cargoes earlier this week, traders said.

BHP Group has offered a cargo for loading in November from the North West Shelf plant in Australia while Angola LNG plant offered two cargoes for delivery in October and November.

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