Oil and Gas

GLOBAL LNG-Prices inch lower as Gorgon plant restarts production

June 2 (Reuters) - Asian spot LNG prices edged lower this week as the early restart of Chevron’s Gorgon production facility in Australia weighed on sentiment, projects offered supply and demand from Japan stayed weak.

Spot prices for July delivery LNG-AS were assessed at $5.40 per million British thermal units (mmBtu), down 5 cents from last week.

“The market is coming off as supply is doing well and demand is mostly covered,” a Singapore-based trader said.

The early restart of Gorgon’s first production line on Wednesday provided an unexpected boost to Asian supplies after operator Chevron initially estimated the outage would last until mid-June.

Project stakeholder Exxon Mobil launched a tender to sell one cargo for delivery in the second half of June days before news of the facility’s restart was made public.

“The Gorgon sell tender came as a surprise,” a second Singapore-based trading source said, adding that a recent Nigerian tender offering three June-loading cargoes was also unexpected.

Nigeria LNG launched the tender last week.

The various supply tenders from Angola, Nigeria and Australia, which offered June-loading cargoes, came amid muted summer demand from north Asian buyers.

“The Japanese are all filled up. They have left over supplies from a mild winter,” the second Singapore trader said.

Any downside to Asia spot prices could be capped by relatively firm European demand, including in Spain, traders said.

Results from the Nigerian and Angolan sell tender are expected to emerge in the coming days, but Asian LNG market participants said it was unlikely that the cargoes would be sold to Asia given the strength in Atlantic prices. (Reporting by Mark Tay in Singapore and Oleg Vukmanovic in London, editing by Adrian Croft)