June 24, 2011 / 10:44 AM / 6 years ago

Global LNG-Asian LNG inches up, but still below $14/mmBtu

PERTH June 24 (Reuters) - Spot prices of liquefied natural gas (LNG) in Asia were seen remaining under $14.00 per million British thermal units (mmBtu), with much of the summer needs covered, market sources said.

“I think a lot of what went on earlier in the year were a number of mid-term deals were agreed that took a little demand out of the summer and potentially out of the winter too,” one Asia-based market source said.

“Even though there are a lot of cargoes being delivered, they are certainly not being priced in the spot market-- they are part of previous deals.”

Spot prices are seen around $13.90 per mmBtu, up slightly from around $13.80 per mmBtu last week, and the source said a number of buyers had recently been side-stepping the spot market in the wake of the Japanese earthquake that increased demand for the supercooled fuel.

The spot market has also slowed due to a lack of available LNG tankers to transport the fuel and in recent weeks some suppliers have been unable to participate in tenders due to the lack of ships, sources said.

Demand for LNG tankers is so high that a jump in orders for the ships could cause difficulties in finding qualified staff to run them in the months and years ahead, according to one shipping recruiter firm.

The Japanese earthquake brought several nuclear reactors offline, increasing demand for LNG. Energy consultancy Wood Mackenzie said this week that surplus global gas supplies could disappear as early as winter 2012 part due to increasing demand from quake-hit Japan.

South Korea said earlier this week it is seeking ways to increase liquefied petroleum gas (LPG) consumption as an alternative to liquefied natural gas (LNG) to avert supply shortages.

NEW SUPPLIES, NEW BUYERS

Inpex Corp , Japan’s top oil and gas developer, said on Friday it has secured buyers to cover the entire annual output of 8.4 million tonnes from its Ichthys liquefied natural gas (LNG) project in Australia.

The agreements with Japan’s Chubu Electric Power , Toho Gas and Taiwan’s CPC Corp bring the project closer to making a final investment decision on the project which it has said it will take in the last quarter of the year.

Another Australian project, Woodside Petroleum’s flagship Pluto LNG project has been delayed by another six months to March 2012 and reported an almost $1 billion cost blowout.

Thai terminal operator PTT has bought a second cargo of LNG from Qatargas to commission Thailand’s first LNG import terminal, on top of the 1 million tonnes a year PTT has agreed to buy from Qatari LNG from late 2011.

The state-run Thai company needs additional super-cooled natural gas to prepare the new Map Ta Phut LNG import facility for the expected start of commercial operations in July.

In Europe, Israel is looking to augment its depleting supplies with new drilling and liquefied natural gas imports while energy companies rush to develop its recently found off-shore reserves as it faces a shortage of gas in 2012.

For a table showing LNG tankers heading to Northwest Europe, click here:

For tankers heading to the US, click here: (Editing by Ed Lane)

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