November 17, 2017 / 6:59 PM / a year ago

GLOBAL LNG-Asian prices rise as Korea Gas Corp buys winter supply

LONDON, Nov 17 (Reuters) - Asian spot liquefied natural gas (LNG) rose this week as state-run Korea Gas Corp purchased around 10 shipments for winter and outages curbed supply.

Spot prices LNG-AS for December delivery rose 25 cents to $9.70 per million British thermal units (mmBtu), and January prices were assessed at $9.85 per mmBtu.

Korea Gas Corp, or Kogas, purchased at least 10 cargoes in the past week for January delivery at prices in the high $9 per mmBtu level with Vitol, Engie, Petronas and Royal Dutch Shell closing sales deals, a trader said.

Signs of South Korean buying could draw Japanese end-users into the market, he added. It remains to be seen how colder temperatures in Seoul and the impact of this week’s earthquake on South Korea’s nuclear fleet influence gas demand.

Estimates of Kogas’ buying varied, including forecasts for between six to nine cargoes for delivery in December and January. The importer has taken more LNG from its long-term suppliers, such as Qatar, in order to limit its reliance on spot markets, traders said.

Qatar, meanwhile, has all but sold out of winter supply after committing much of its spare output to China and South Korea, a development that could tighten Asia’s gas markets as the peak demand season bites.

Taiwan’s state-run power utility CPC bought a January cargo on Thursday but the price level could not be confirmed, a trader said.

Royal Dutch Shell may be seeking LNG for its portfolio from February.

In addition to that, a weekend outage hindered output from Australia’s 16.3 million tonne/year North West Shelf liquefaction plant.

Four of five production units, or trains, were back in service by Monday this week, but the fifth may remain offline, traders said.

Chevron’s Gorgon facility in Australia also shut down its third production unit this week for a planned maintenance lasting up to Dec. 25, trade sources said.

Despite this, supply was offered from multiple sources, including via tenders and bilaterally.

Russia’s Sakhalin-II export plant put up two January cargoes for sale with bids due on or before Nov. 22 and the tender valid until Nov. 23, traders said.

In Australia, the Gladstone project marketed a early December cargo.

Angola LNG on Friday offered a Nov. 23-25 loading cargo.

“Three cargoes are being offered in January excluding these latest tenders and the Chinese have got a lot of offers for December and January cargoes,” a Singapore-based trade source said.

Trading house Gunvor is picking up a cargo from Trinidad in mid-December and another from Sabine Pass in the United States later in the month, trade sources said.

Gunvor chartered the Excalibur tanker to pick up its Trinidad cargo for around $30,000/day, well below prevailing market rates of between $50,000-$60,000/day because the vessel needs to be cooled down with LNG before it becomes operational, shipping sources said.

Gunvor is seeking a second vessel for its Sabine Pass cargo in late December. The Woodside Chaney tanker left Singapore empty and is sailing toward the Atlantic around Africa currently, potentially incurring a hefty positioning fee for the charterer, trade and shipping sources said.

Pakistan LNG also reduced its requirement for December and January deliveries. A cargo by Trafigura due to be delivered in December and two by Gunvor due in January are no longer needed.

Gunvor may be due to supply the first commissioning cargo to Pakistan’s second LNG import terminal, the BW Integrity, at the end of the month, several trading and market sources said.

Reporting by Oleg Vukmanovic; Editing by Edmund Blair

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