Global LNG-Asian LNG prices above $12 on summer demand

PERTH/NEW YORK, April 28 Thu Apr 28, 2011 6:52am EDT

PERTH/NEW YORK, April 28(Reuters)- Asian spot prices of liquefied natural gas were seen around $12.30 per million British thermal units (mmBtu) this week, with the high-demand summer months approaching and buying from Japan, China, and other Asian nations expected to ramp up.

Japan, the world's largest LNG importer, is facing mostly hotter-than-average weather from May to July, raising the prospect of power supply problems as it struggles to keep the electricity on in the wake of last month's massive earthquake and tsunami.

The quake-hit nation is understood to be well-supplied through May.

Chinese demand may also jump, with Chinese government officials warning the country must brace to cope with power shortfalls as it enters the high energy-consuming summer months. [ID:nL3E7FP2VT]

"China is going to have a very tight situation in terms of generation," one Singapore-based market source said, adding that it will likely be in the market for significant additional LNG tonnage.

China's LNG imports rose 40 percent, with much of the extra tonnage coming from Qatar and Indonesia. [ID:nEAP001306]

India's Petronet LNG said this week it plans to import 10 spot liquefied natural gas cargoes this fiscal year to meet growing energy demand.[ID:nL3E7FQ2T1]     ATLANTIC WELL-SUPPLIED     A steady stream of LNG tankers continued to arrive at British terminals this week, a sign of ample supply from top LNG exporter Qatar. The number one producer now has the capacity to produce up to 77 million tonnes of LNG per year after two final trains came online early this year.     For a table showing LNG tankers heading to Northwest Europe, click here:     Wholesale gas prices in Britain -- a benchmark for global gas sales -- surged in mid-March on fears that leading LNG buyer Japan would need more fuel to replace nuclear plants shut by the March 11 tsunami. [ID:nLDE72A27R]

Despite a fall back in prices, LNG tankers continue to arrive.     "NBP has come back down from its highs, which could be attributed to the influx of LNG into the UK over the past month," said Waterborne LNG analysts in Houston.     "Back-to-back months of double digit increase in LNG imports and softening gas prices are signs of a well-supplied market."     U.K. gas futures have retained a near $5 premium over U.S. prices which have languished around $4.30 per mmBtu due to comfortable supplies.     U.S.-based investment bank Goldman Sachs said this week British gas prices are likely to rise strongly due to Japan's increased need for LNG and reduced supply from Libya. [ID:nLDE73Q1YS]      The bank said the global LNG market will likely be more balanced this year due to the Japan crisis, and not oversupplied as previously expected.     US imports remain slow at just under 1 billion cubic feet per day, as low gas prices deter spot shipments. For tankers heading to the US, click here: (Editing by Sugita Katyal)

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