LNG Spot Prices Drop; Demand Dips from Brazil, Japan

MarineLink.com
Friday, February 28, 2014

By Oleg Vukmanovic and Jacob Gronholt-Pedersen,  Reuters

Asian spot liquefied natural gas (LNG) fell this week as demand from Brazil's Petrobras slackened and top Japanese buyers switched to cheaper fuels and relied more on supplies under long-term deals.

Prices for April delivery dropped to around $18.10 per million British thermal units (mmBtu) from $19.60 per mmBtu last week.

Petrobras, a major Atlantic Basin LNG buyer in recent weeks, withdrew from the global spot market after rainfall boosted Brazil's hydroelectric reserves and cut demand for gas-fired power generation, traders said.

Japanese utilities, meanwhile, increased deliveries of lower-cost LNG under long-term, oil-linked deals.

"Prices would rebound quickly if Petrobras had to come back into the market," a trade source said in light of finely balanced supply-demand.

"There is no additional supply available," he added.

Spot cargo trades were scant over the past week, resulting in a wide bid-offer spread of almost $2 per mmBtu, the same source said.

"The Asian buyers have already secured the necessary winter volumes ... not only for spot deals but also (through) short-term deals," Chubu Electric Power's head of trading, Hiroki Sato, told Reuters this week.

"In Chubu's case, if the spot price jumps above $18 (per mmBtu), it is better to buy oil," he said.

Sato added that Chubu did not expect LNG demand to rise this summer due to the probable restart of some of Japan's idled nuclear reactors.

Cargo Deals
German utility RWE appears to have bought a Norwegian LNG cargo from GDF Suez, which it has sold to Japanese utility Tokyo Electric Power, or Tepco, several sources said.

Portugal's Galp sold a cargo to Brazil's Petrobras for loading in mid-April at an estimated price in the mid-$16 per mmBtu level.

Galp's offer to sell 30 LNG cargoes over a five-year period closes in March, by which time traders have to submit bids.

Up to three cargoes due to be re-exported from Belgium's Zeebrugge and Spanish terminals in April will add to global spot availability, another trader said.

Malaysia's state-run Petronas is in advanced talks to buy 18 LNG cargoes from Algeria over a three-year period, sources with knowledge of the discussions said.

The move underscores Algeria's growing shift towards higher-margin LNG sales after halving pipeline exports to Italy last year.

A compressor leak at Angola's new export plant has delayed loading programmes and reduced output at the $10 billion project, which is due to shut for two months from July, a site manager said earlier this week.

Delays caused by a leaking valve at an air compressor unit have meant that LNG initially due to start being pumped aboard a waiting vessel on Tuesday this week has been pushed back to Monday next week.

Meanwhile, Gazprom Marketing & Trading has won a tender to deliver an LNG cargo to Argentina in early April, traders said.

Argentine state-run energy firm Enarsa issued a tender for two LNG cargoes to be delivered in April earlier this month. Out of two to three offers Enarsa received, it only awarded the single slot at the start of the month, a source said.

(editing by Jane Baird)


Tanker Trends

Veg Oils Can Benefit Tankers

A number of product tankers, with certain characteristics, can carry edible oils (also called veg oils) as well as oil products, meaning that veg oil trade should

Worldscale Flat Rates to Fall Again

The concept of Worldscale is not an easy principle to grasp, particularly for those outside the tanker industry, says Weekly Tanker Market Report by Gibson.   The

What is Happening to Suezmax Rates in 2016?

Several years ago, the main market for Suezmax tankers was the West Africa to North America trade. When this market dried up in the period from 2012 to 2014/15,

Energy

Gasum, Wärtsilä Join Forces to develop Gas Value Chain

New joint co-operation between Gasum and Wärtsilä aims to develop the utilization and distribution of natural energy gases in marine and land markets. Gasum,

Worldscale Flat Rates to Fall Again

The concept of Worldscale is not an easy principle to grasp, particularly for those outside the tanker industry, says Weekly Tanker Market Report by Gibson.   The

Keppel to Deliver First North Sea FPSO

Keppel Offshore & Marine (Keppel O&M)'s wholly-owned subsidiary Keppel Shipyard Ltd (Keppel Shipyard) is on track to deliver a Floating Production Storage and Offloading

LNG

Gasum, Wärtsilä Join Forces to develop Gas Value Chain

New joint co-operation between Gasum and Wärtsilä aims to develop the utilization and distribution of natural energy gases in marine and land markets. Gasum,

BP, ExxonMobil, ConocoPhillips 'Quit' Alaska LNG Project

BP, Conoco Phillips, and Exxon Mobil said that the 65-billion dollar megaproject would be too unprofitable for them to move into the next phase of development.

Viking Grace Marks 1,000 LNG Bunkering Milestone

From the very beginning, the M/S Viking Grace – delivered in January 2013 – was an environmental milestone.   The vessel attracted global attention as an environmental

News

Five Vessels Delivered for Qatar’s New Port Project

Nakilat Damen Shipyards Qatar (NDSQ) has delivered five vessels as part of an 11-vessel order for New Port Project (NPP). Built entirely at the Erhama Bin Jaber

MN100: BlueTide Communications

The Company: BlueTide is a leader in the provisioning, implementation, monitoring and support of satellite equipment. Combining the power of HUGHES proprietary

Transas to Unveil the ‘Future of Maritime Operations’

Today's maritime industry requires realistic solutions and concepts for a modern, integrated operational infrastructure that delivers a sustainable, viable future,

Logistics

Samskip Acquires Euro Container Line AS

Samskip has completed the acquisition of Euro Container Lines AS, building on a strategy for growth in the Nordic area to make its largest ever acquisitive move in Norway.

284 Ships transit Suez Canal Last Week

Suez Canal traffic data showed that 284 ships transited the canal, with a total load of 14.34m tonnes, from 19 to 24 August 2016, reports Daily News Egypt.   Compared to July 2015,

What is Happening to Suezmax Rates in 2016?

Several years ago, the main market for Suezmax tankers was the West Africa to North America trade. When this market dried up in the period from 2012 to 2014/15,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Naval Architecture Offshore Oil Pipelines Pod Propulsion Salvage Ship Repair Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0921 sec (11 req/sec)