* Papua New Guinea quake triggers LNG export force majeure
* "Beast from East" causes temperatures to plummet acrossEurope
* UK spot gas prices jumped to record, Asia LNG also up
By Henning Gloystein
SINGAPORE, March 2 (Reuters) - Global natural gas marketswere roiled this week as an earthquake in Papua New Guineacaused a large-scale supply disruption of liquefied natural gas(LNG) while a late winter blast in Europe triggeredunprecedented price spikes.
ExxonMobil Corp XOM.N has declared force majeure onexports from its Papua New Guinea LNG project, which has beenshut since a powerful earthquake on Monday, an industry sourcefamiliar with the matter said on Friday.
A company declares a force majeure when it is unable tocarry out a contract because of forces beyond its control.
Exxon (NYSE:XOM) declined to comment on the force majeure. a result, Asian spot LNG prices LNG-AS jumped by 5percent since last week, to $8.80 per million British thermalunits (mmBtu).
Exxon is having trouble gauging the extent of theearthquake's damage, given the remoteness of the gas field, inthe mountainous jungles of Papua New Guinea, 700 km (435 miles)from the export terminal.
"It is difficult to assess the duration of productionoutages, but in our view, given the location and magnitude ofthe earthquake, as well as the scale of the aftershocks, weanticipate at least a month's downtime is likely," UBS bank saidin an investor note on the earthquake's likely impact on the LNGsector.
The outage has left several North Asian buyers seekingreplacement cargoes in the spot market, leading to a furtherrise in market activity, which already hit records in January. importers for China as well as Taiwan's CPC Corp areseeking to replace disrupted contracted supplies from Papua withshort-term delivery cargoes from the spot market, said threetraders that participate in the market.
Other traders said on Friday the seasonal drop-off in demandin North Asia - which includes Japan, China and South Korea, theworld's top three buyers - as winter ends and temperatures riseprevented a bigger price rise.
Spot LNG prices for May were already $1 lower than April's,at around $7.75 per mmBtu, the traders said.
The market situation has also been eased by increasingsupplies from Malaysia's Bintulu LNG export facility, which hadseen disruptions in recent weeks, said two traders withknowledge of the matter. FROM THE EAST'
While the winter in North Asia is showing signs of taperingoff, most of Europe has been caught by a wave of extreme coldlate in the season, which pushed up British spot natural gasprices TRGBNBPD1 to record highs of 275 pence per therm onMarch 1, the equivalent of over $30 per mmBtu, and up 130percent from the last close in February, and up 400 percentsince the end of December. spike was a result of extreme cold across westernEurope, caused by unusual Siberian winds which the media hasdubbed "The Beast from the East" and which caused a surge in gasdemand for heating as temperatures plummeted. importers were vying with bids from Asia for spotLNG cargoes from Qatar and the United States, traders said.
With warmer weather approaching in most of Europe, traderssaid the supply squeeze would likely ease into next week.
Weather data in Thomson Reuters Eikon showed temperaturesacross most of western Europe will likely rise towards theseasonal norm of around 5 degrees Celsius (41 degreesFahrenheit) within a week.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^GRAPHIC: UK natural gas price spike
http://reut.rs/2CROoXsGRAPHIC: Average temperatures: Germany, France, Switzerland &Austria
http://reut.rs/2CSqOd9GRAPHIC: Papua New Guinea quake IMG
http://tmsnrt.rs/2ow1YLR
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