* Algerian spot to mid-term tenders attract attention
* BG Group, Petronas win two cargoes from Nigeria tender
* Fourth Angola cargo rumoured before shutdown
* Trinidad offers two September cargoes
* Shell delivers first shipment to Israel
By Oleg Vukmanovic
LONDON, Aug 23 Liquefied natural gas (LNG) spot
prices fell to $15.30 per million British thermal units (mmBtu)
this week as African suppliers pumped out more cargoes in a
spree of tenders aimed at Asian and Latin American buyers.
Asian LNG prices were pegged in the mid-$15/mmBtu
level last week.
Higher output from Algeria, Nigeria and Angola marks a
turnaround from a period of volatile output in recent months.
A three-week naval blockade of Nigeria's Bonny Island
production facility crippled exports last month, but output has
rebounded since and its first free-on-board tender has been
Malaysia's Petronas and BG Group have each
won a cargo from the facility loading in early September,
according to trading sources. The exact price levels were not
Angola's new LNG plant also appears to have surmounted
recent setbacks after exporting a third cargo, amid talk that a
fourth cargo may be imminent before the facility shuts down for
Angola's first cargo sailed to Brazil. The second was sold
in a tender process to Chevron, the plant's operator, which then
re-sold it to China National Offshore Oil Corp. for around
$16.20/mmBtu. Chevron is said to have paid $16/mmBtu for the
Angola's third cargo is currently heading to Japan.
But it is Algeria that has dealt traders the biggest
surprise with a spree of tenders for spot and medium-term LNG
supplies in recent weeks.
Algeria's state-run energy firm Sonatrach has launched
several liquefied natural gas (LNG) sales tenders including for
single cargoes, a six-cargo strip from October and a 12-month
supply commitment, trade sources said.
Three tenders offered to global buyers is unusual for
Algeria where falling gas production and a lack of upstream
investment has reduced LNG output in recent years.
But the country's LNG output may rise after officials agreed
to scale back piped gas deliveries to Italy, signalling a shift
in export strategy for Africa's biggest gas producer.
Japan has relied heavily on LNG to make up for the nuclear
power capacity it lost after the 2011 tsunami, but utilities
have recently been ramping up coal use to cut costs.
A total nuclear blackout in September is expected as the
country's last two atomic plants shut down for safety checks,
which may lead to an increase in demand for alternative fuels,
Safety incidents at nuclear power plants in the last few
years have created a growing crisis of confidence in nuclear
energy in Japan, South Korea, and Taiwan, the world's three
largest LNG buyers.
In the latest safety crisis, Taiwan said its nuclear power
plant may have been leaking radioactive water for three years.
South Korea's nuclear industry has become embroiled in
scandal after finding forged safety certificates on parts.
In the Americas, Trinidad has launched a sell tender for two
cargoes loading in September, while Latin American countries'
demand for the fuel continues to march higher.
"Argentina, Brazil and now Mexico have become a major driver
in the spot LNG market, since the majority of their LNG imports
are purchased no more than a year in advance," analysts at
Houston-based energy consultancy Waterborne Energy said.
"Transatlantic re-exports have increased 327% year on year
in August, with 12.34 billion cubic feet re-exported from Europe
to Latin America," Waterborne said.
Re-exports occur when a cargo initially imported into a
European terminal is loaded back onto a different tanker for
onward transport to a higher-paying market.
The practice has become increasingly popular since gas
prices in Europe have diverged dramatically with Asia and Latin
America, which is struggling to cover its growing energy needs.
This month almost 10 percent of western Europe's total
imports of LNG were re-exported to Argentina and Brazil, figures
In Europe, Shell delivered its first LNG cargo to Israel's
floating LNG terminal at Hadera after BP's 10-cargo deal to
supply the country expired earlier this year.
The first commissioning cargo for Italy's floating offshore
import terminal Toscana LNG is expected to arrive before the end
of the month, Waterborne said.