PERTH Aug 5Asian liquefied natural gas (LNG)
spot prices for September remained just under $15 per million
British thermal units (mmBtu) during the week, with most buying
for the month done, and buyers looking to fill cargoes for
October and beyond.
"The demand has been filled... September buying seems to be
done now," one market source said.
Strong demand is likely to continue with top buyer Japan
still depending heavily on LNG to replace the nuclear power it
lost due to the March earthquake.
"Over the next couple of weeks, it'll probably tighten up to
around the $16 level," the source said.
Top buyers Japan and South Korea as well as smaller players
in the LNG market usually begin stocking up for the winter as
the summer draws to a close and prices are typically at their
peak between October and February.
"Traditionally prices spike during the winter period because
you have Kogas and Japan adding to their stock... demand depends
on how well stocked up they are," another market source said.
In a sign of increasing southeast Asian demand, the gas
trading arm of Petrovietnam, PV Gas, said on Friday it was in
talks with Qatargas over a contract to import LNG. PV Gas is
expected to begin importing LNG around 2013.
ATLANTIC CARGOES FEEL ASIA PULL
Stronger demand and higher prices in Asia appeared to be
drawing cargoes eastward.
Spot prices in Spain were said to be trading narrowly above
the UK's NBP front-month gas contract, putting it at significant
discount to Asia even after adding shipping costs.
A tanker loading at Belgium's Zeebrugge terminal on August 9
will deliver to Asia, sources said.
Global energy trader Gunvor has sold the volumes to a
Pacific buyer and Russia's Gazprom also looks set to divert
Atlantic production east.
The overwhelming proportion of Europe's LNG continues to be
shipped from Qatar, as most traders focus instead on the world's
premium market in Asia.
Qatar tends to send gas to Britain irrespective of prices in
Asia because it bankrolled Europe's biggest import terminal
South Hook, in southwest Wales. That's keeping a lid on British
For a table showing LNG tankers heading to Northwest Europe,
For tankers heading to the US, click here:
(Editing by Michael Urquhart)