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

Tanker Trends

Scorpio Tankers: Latest Financial & Ship Delivery News

Scorpio Tankers Inc. says it has updated its stock buyback program; lists its latest new vessel deliveries, and gives the release date of its second quarter 2014 earnings report.

Suicide Attack Escalates Libya Violence, Oil Output Slips

Crude output slips for first time since port deal; fresh clashes in Tripoli and Benghazi. Brega oil port seen open in few days. A twin suicide bombing at a Libyan

Oil Products Flow to Primorsk Resumed

Russia resumed oil products shipments to Primorsk after a halt following "criminal tapping" of pipeline, a subsidiary of Russian oil pipeline monopoly Transneft said.

Energy

Ocean Mineral Singapore Set for Seabed Exploration

Ocean Mineral Singapore Pte. Ltd. (OMS) has received approval from the International Seabed Authority (ISA) on its application for its first seabed exploration licence.

Suicide Attack Escalates Libya Violence, Oil Output Slips

Crude output slips for first time since port deal; fresh clashes in Tripoli and Benghazi. Brega oil port seen open in few days. A twin suicide bombing at a Libyan

Maine Port City Bans Oil Loading

City councilors in South Portland, Maine, voted late Monday night to ban the loading of crude oil onto tankers along its waterfront, throwing up yet another roadblock

News

USCG Rescues Woman from Detroit River

The Coast Guard rescued a 30-year-old woman from the Detroit River late Sunday evening after she was reported to have fallen overboard when the vessel she was on was struck by another boat's wake.

Sanjam Gupta helps Launch WISTA in Sri Lanka

Within two years of the launch in India in 2012, the Women’s International Shipping and Trading Association (better known as WISTA), Ms. Sanjam  Sahi  Gupta,

General Dynamics Launches Morgan County NextGen-911

General Dynamics Information Technology, a business unit of General Dynamics, has implemented a NextGen-911 emergency service solution for Morgan County, Ohio.

Logistics

Heavy Lift & Project Vessels Face Berthing Delays at Indian Ports

Heavy Lift & Project vessels calling at Indian ports are experiencing congestion, which according to the trade is an artifically created situation. They point out that unlike other vessels,

Suicide Attack Escalates Libya Violence, Oil Output Slips

Crude output slips for first time since port deal; fresh clashes in Tripoli and Benghazi. Brega oil port seen open in few days. A twin suicide bombing at a Libyan

New ICTF Boosts Crowley’s Efficiency

The opening of Florida East Coast Railway’s (FEC) new, state-of-the-art intermodal container transfer facility (ICTF) adjacent to Crowley Maritime Corporation’s Port Everglades, Fla.

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Pipelines Pod Propulsion Port Authority Salvage Ship Simulators 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: 0.0955 sec (10 req/sec)