PERTH/LONDON Aug 19 Asian liquefied natural gas
(LNG) spot prices for September rose above $15 per million
British thermal units (mmBtu) during the week, with strong Asian
demand keeping prices high.
"Asian markets were holding just north of the $15 level for
cargoes as the demand for LNG continues to ramp up," ICAP
analysts said in a note.
Top LNG importers Japan and South Korea both reported higher
imports for July.
Japan's LNG imports rose 14.3 percent in July compared with
the same period a year earlier as the nation continues to depend
on the fuel to replace nuclear power lost due to the March
earthquake, while South Korea's imports increased 9 percent
Spot prices in Asia have now risen over 50 percent since
Japan's earthquake in March boosted demand for LNG. LNG-AS
The spread between Asian spot prices around $15.10 and
British prices was about $5.40 per mmBtu this week, wide enough
to coax cargoes to Asia from the Atlantic. Recent Nigerian
cargoes have been sent east to higher-paying Pacific markets.
Shipments to Asia from the Middle East and the Atlantic
Basin increased by 1.357 million and 1.146 million metric tons
respectively in July, while Asia-Pacific shipments of LNG to
Asian buyers fell, Waterborne LNG analysts said in a note.
Qatar, Nigeria, Trinidad, Yemen, and Abu Dhabi had the
largest year-over-year increases shipments to Asia.
And the trend looks set to continue, despite extremely high
shipping costs of just under $100,000 a day.
"Spreads to Asia from the Atlantic remain at all time highs
with winter 11 spreads now looking close to $7.50," ICAP
Supply from the Atlantic Basin was also seen in South
Korea's long term supply agreements with Shell and Total signed
this week. Under the deals, totaling $84 billion, cargoes will
be sourced from Australia, and from company portfolios across
the Atlantic Basin. [ID: nL3E7JH056]
The boom in Asian supply may leave European import terminals
short as Asia sucks up Atlantic Basin supply, analysts said this
In the Atlantic, U.S. gas prices hit five month lows on
Thursday and ample supply continued to deter spot LNG shipments
to terminals there.
Flows from U.S. terminals hit 0.63 billion cubic feet per
day on average last week, according to Tudor Pickering Holt
analysts. The flows are near contractual minimums, as traders
ship gas elsewhere. U.S. deliveries averaged 1.2 bcfd in 2010.
For a table showing LNG tankers heading to Northwest Europe,
For tankers heading to the US, click here:
(Additional reporting by Oleg Vukmanovic in London; Editing by