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Global LNG-Asian buying, Angola outage push spot above term price
November 1, 2013 / 5:46 PM / in 4 years

Global LNG-Asian buying, Angola outage push spot above term price

* Supply tight as buyers firm up bids

* Angola LNG enters maintenance, resumes in Dec

* South Korea dodges spot market with Bontang supply

* Singapore’s Pavillion locks in 0.5 mln tonne supply deal

By Oleg Vukmanovic and Rebekah Kebede

LONDON/PERTH, Nov 1 (Reuters) - Asian liquefied natural gas (LNG) prices rose to $17.50 per million British thermal units (mmBtu) this week as utility buying, a new tender in Argentina and a full shutdown at Angola’s export plant fuelled gains.

Prices rose from around $17.15/mmBtu last week.

“Supply is looking tight for the winter,” one Singapore-based trade source said.

Angola, which exported its fifth ever cargo to Japan earlier this month, has finally entered full maintenance after repeated delays. “The sales price of its fifth shipment was north of $17/mmBtu,” a trader said.

The 5.2 million tonne/year plant is due to come back from maintenance in December so that stakeholders do not miss out on peak winter price gains, industry sources said. A second maintenance is due to take effect at the plant in July, 2014.

The winner of PetroChina’s tender for four cargoes for delivery in December-March remains uncertain.

The speed with which it picked a winner has fuelled speculation that one of PetroChina’s long-term suppliers, possibly Qatar or an offtaker there, will deliver the fuel.

One source said the buyer was looking to fill additional requirements.

Current high spot prices make cargoes under oil-linked long-term contracts seem increasingly attractive and buyers such as South Korea are leaning heavily on these volumes, avoiding where possible spot markets.

State-run buyer Kogas is taking delivery of more LNG from Indonesia’s Bontang plant where output has outpaced production programs set at the end of 2012.

Kogas is also taking between 6-10 additional cargoes owed to it from when Bontang was unable to meet its contracted requirement.

Japan’s LNG imports fell 7.7 percent in September, although industry sources report sporadic cargo purchases from utilities there.

Singapore’s Pavilion Energy this week signed up its first long-term supply for 0.5 million tonnes per year with a major European oil and gas multinational, it said at an industry conference. Traders said Total was the supplier.

Pavillion also added that it would deliver its first LNG cargo into Asia by February.

Qatargas delivered the first commissioning cargo of LNG to China’s new Zhuhai LNG terminal last week.

China faces possible supply shortages as the coldest months of December and January draw near, according to its top planning agency, the National Development and Reform Commission (NDRC), which may force China to import more spot LNG cargoes to meet peak demand.

Osaka Gas Co, Japan’s second-largest supplier of city gas, may also step up LNG imports from Russia to feed rising demand.

Spain’s Gas Natural became the second ever buyer after China’s CNOOC of long-term volumes from the Novatek-operated Yamal LNG export facility in the Russian Arctic.

The firm signed a deal to buy 2.5 million tonnes/year, it said, with industry sources adding the offtake period was for 20 years. It did not say how the cargoes would be priced, although CNOOC’s volumes are linked to Brent crude oil.

In Europe, the Gate import terminal in the Netherlands is in the process of completing its firth re-export from the terminal aboard the Vitol-chartered Excel tanker.

Spanish terminals meanwhile are continuing to re-load cargoes onto tankers for onward delivery to Asia or South America.

Argentina’s state-run energy firm YPF launched a tender to buy two dozen additional LNG cargoes for delivery in 2014, industry and trade sources said.

Maintenance at Algeria’s new Skikda LNG production train was on-track to have ended and for production to resume by the start of November. It was not possible to confirm whether output had resumed.

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