* Japan in market for April cargoes, as one more reactor
* Asia continues to draw Atlantic cargoes, freight costs
By Rebekah Kebede
PERTH, Feb 24 Asian liquefied natural gas
spot prices rose to over $15 per million British thermal units
(mmBtu) LNG-AS as Japanese demand for the fuel increased.
Japan, the world's largest LNG consumer, was seen back in
the market for LNG cargoes for April delivery as it struggles to
meet electricity demands with more than 95 percent of its
nuclear reactors offline.
Kansai Electric Power Co shut its Takahama plant
late on Monday for scheduled maintenance, leaving just two of 54
of Japan's nuclear reactors online.
The number of reactors online has dwindled since the
Fukushima radiation crisis, with those entering routine
maintenance unable to restart due to public safety concerns.
By April, there may be no reactors left online unless
reactors meet new safety checks and receive clearance from the
central and local governments.
A cold snap in Europe this week may have also prompted some
pre-emptive buying demand in Asia, with some traders fearing the
higher European prices would increase Asian spot prices up as
"That has given a bit of support to the Japanese market and
they are more willing to buy," one market source said.
South Korea, the world's second largest consumer of the
fuel, was on the sidelines, with more of its supply coming from
long-term contracts after the Fukushima crisis pushed spot
prices up to around $18 per mmBtu, prompting it to lock up
supplies in longer-term contracts.
FLOW FROM ATLANTIC CONTINUES
Asia continues to draw a steady stream of re-exports from
the Atlantic Basin with higher prices luring cargoes eastward.
Spot prices in Europe were seen at around $11 per mmBtu
compared to North Asian prices of around $15 per mmBtu.
In March, Asia will receive at least four LNG cargoes
re-exported from the Atlantic Basin, according to Waterborne LNG
Kansai Electric is expected to receive a Spanish re-export
cargo in early March, South Korea is expected to receive a
Belgium re-export in mid-March, and Japan's Tokyo Electric
expects a re-export from Brazil in late March.
The re-exports continue despite the rising cost of LNG
tankers, which have increased five-fold since the summer of 2010
to $145,000 per day now.
LNG shipping firm Golar LNG said this week it
expects improved tanker earnings until 2017 as an increase in
Japanese demand reduces the supply of available vessels.
The Norwegian shipper said its October-December net income
more than tripled, driven by sustained cargo diversions from
Europe to Asia and said it sees robust growth outlook for the
But the global LNG market faces constraints in 2012 as
potential delays to new projects risk eroding a narrow supply
surplus, with the effect of keeping prices high, Reuters
research and analyst data suggests.
(Editing by Miral Fahmy)