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)

Maritime Reporter October 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Tanker Trends

Venezuela Ships First Crude Mixed with Algerian Oil to China

Venezuela is sending its first shipment of crude mixed with Algerian light oil to China, according to state oil company PDVSA and traders.   Venezuela recently

Asia Tanker, VLCC Rates Could Climb

Charterers to release 30 Middle East VLCC cargoes next week. VLCC market buoyed by upbeat Suezmax, Aframax sectors. Rates for very large crude carriers (VLCCs)

BG Group's Queensland Curtis LNG to Ship First Cargo

BG Group is set to ship the first cargo of liquefied natural gas from its flagship gas project Queensland Curtis LNG on Dec. 20, a source familiar with the matter told Reuters.

LNG

HHI to Build FSRU for Höegh LNG

A new Floating Storage and Regasification Unit (FSRU) will be built by the Korean shipbuilding Company Hyundai Heavy Industries (HHI). This FSRU will be the fifth

BG Group's Queensland Curtis LNG to Ship First Cargo

BG Group is set to ship the first cargo of liquefied natural gas from its flagship gas project Queensland Curtis LNG on Dec. 20, a source familiar with the matter told Reuters.

Europe Stockpiling Low Cost, Surplus LNG

Demand from top Asian buyers drops sharply; Asian, European gas price spreads converge. Europe set to becoming dumping ground for LNG. Europe is set to become

News

7 Rescued from Sinking Freighter Near Haiti

Seven crewmembers were rescued after their 100-foot coastal freighter began taking on water and sank approximately 45 miles north off of Cap Haitien, Haiti, Friday.

Gazprom Transgaz Ufa Organizes Arts Festival

Over 200 healthy children and children with disabilities from Bashkortostan as well as the Volga Region participated in the Breaking the Barriers second interregional children’s arts festival,

Time-out for Kwanza Drilling

Statoil has decided to cancel the Stena Carron rig contract after fulfilling the work commitments in the Statoil-operated blocks 38 and 39 in the Kwanza basin offshore Angola.

Logistics

October Imports up 9% at Port of Oakland

Containerized imports shipped through the Port of Oakland were up 9.17% in October from a year ago, the port said, citing the surge as the biggest jump in import cargo volume in six months.

Cost to Fuel Ships Falls

For a ship that burns 24 tonnes of fuel per day while steaming, fuel costs are reduced by as much as $1 million a year if current price level stay put. Assuming

Asia Tanker, VLCC Rates Could Climb

Charterers to release 30 Middle East VLCC cargoes next week. VLCC market buoyed by upbeat Suezmax, Aframax sectors. Rates for very large crude carriers (VLCCs)

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Naval Architecture Pipelines Port Authority Ship Repair Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | 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: 0.1112 sec (9 req/sec)