ASIA SPOT LNG: Platts Jan JKM up at $15.85/MMBtu on tight supply, tender
Singapore (Platts)--30Nov2012/519 am EST/1019 GMT
Platts January LNG Japan Korea Marker ended the week higher at
$15.85/MMBtu on the back of tight supply and an impending buy tender from
Argentina for its 2013 supply.
The January JKM started at $15.10/MMBtu Monday.
Argentina's state energy company Enarsa may seek up to 80 cargoes of LNG
in its buy tender for 2013, which it may issue next week, market sources who
received the pre-tender document told Platts Thursday. Enarsa is currently
conducting a pre-qualification process among LNG sellers, the sources said,
adding that the company did not give details on the price basis for the
For the 2012 tender, Enarsa awarded contracts for the delivery of 56
cargoes of 138,000 cu m each, less than the up to 80 cargoes it had
originally set out to buy, Platts previously reported.
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Besides impending demand from Argentina, spot supply for the period
continued to remain tight even as Norway's Statoil restarted its Snohvit LNG
Statoil said Wednesday that production at its 4.3 million mt/year
Hammerfest LNG plant has resumed after a temporary closure, following a power
failure on November 19.
"Interference to the power system, which arose during maintenance work
on the plant's battery-based reserve power supply, led to the plant's own
power and that from the grid being switched off," the company said in a
BP Indonesia, operator of the Tangguh LNG plant, expects its 3.8
million mt/year Train 2 to resume operations in mid-December, after
completion of repairs by early next month.
Total resumed supplying feed gas to Nigeria LNG recently. "We still have
a force majeure in place ... no idea when the force majeure will be lifted as
it is an operational matter," a NLNG spokesperson told Platts.
Meanwhile, existing projects such as Yemen LNG were just recovering
production after a pipeline bombing, while cargoes from Trinidad [& Tobago]
were going to fulfill original term obligations, a Singapore-based producer
said. This further reduced spot supply for the period.
A lack of vessels and additional costs associated with shipping a cargo
from Europe to Asia combined to reduce LNG volumes that could be released
from Europe, a Singapore-based trader said. "With the January UK National
Balancing Point gas hub price close to $11/MMBtu, sellers will add $5/MMBtu
to offer Atlantic cargoes at around $16/MMBtu," the trader added. Freight for
a Belgium to Japan/South Korea journey was $3.80/MMBtu Friday, according to
"You can only keep the Atlantic-Asia freight cost under $4/MMBtu if you
don't have to reposition your ship," the same trader said. Repositioning an
LNG vessel requires charterers to ballast an empty ship from its original
position to the loading port. Ships transporting LNG from Europe to Asia
typically sail through the Suez Canal.
"If you sail through the Suez Canal, you have to wait to convoy with
other vessels and a naval escort to protect your ship from pirates off the
coast of Somalia," a second Singapore-based trader said, adding that this
would result in higher shipping, security and insurance costs.
With the onset of peak winter demand season, North Asian buyers showed
firm interest for spot cargoes.
Cold weather gripped North Asia and provided potential demand for spot
cargoes, sources said. Most of Japan, Asia's largest LNG buying country by
volume, will have a 60% probability of below-normal cold temperatures from
December 1 through 30, according to a forecast released by the Japan
Meteorological Agency Friday.
Japan's three-month weather forecast for December to February indicates
colder-than-normal weather for 10 of the country's 12 regions, according to
data from the JMA November 23.
"[LNG] buyers in Japan look at the JMA data and since it is forecast to
be cold, this could boost demand," a North Asian buyer said, adding that he
was looking for two cargoes delivered in either January or February.
PetroChina could also be looking for up to two January shipments after
buying a strip of December and January delivered cargoes sometime back, a
Tokyo-based trader said.
PetroChina recently concluded a deal for a January shipment with
Qatargas at $15.05/MMBtu, with the transaction setting the bar for any
further January negotiations, sources said. PetroChina and Qatargas officials
were not available for comment.
Platts January DES West India settled at $14.20/MMBtu, up from Monday's
Indian buyers continued to show interest in December and January spot
LNG, providing competition for other Asian buyers. State-owned gas utility
GAIL has issued a buy tender seeking a mid-December delivered shipment, a
Singapore-based source said, but was unable to provide more details. GAIL
officials were not available for comment.
--Hong Chou Hui, email@example.com
--Edited by Geetha Narayanasamy, firstname.lastname@example.org