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Asia spot LNG: May Platts JKM dips 5 cents following recent Asia Pacific tenders

Singapore (Platts)--1 Apr 2016 845 am EDT/1245 GMT


The Platts JKM for LNG cargoes delivered in May ended the Asian trading week down 5 cents at $4.25/MMBtu Friday, following recent results from sell tenders in the Asia Pacific.

Sell tenders from both Papua New Guinea LNG's and Donggi Senoro's were heard to have drawn limited interest from buyers, particularly from North Asia.

The tender from Papua New Guinea for a late May delivered cargo was also heard to have only been offered to buyers with existing relationships to the project, further limiting the pool of participants.

PNG LNG's sell tender was heard awarded to a term offtaker on a delivered ex-ship basis in the low-$4s/MMBtu. A couple of traders said the price was around $4.20/MMBtu, although this was unconfirmed.

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Taiwan's CPC is a term offtaker from the project, and was heard looking for a May cargo in a buy tender that closed earlier this week. But the award results were unclear.

Meanwhile, initial reports from Indonesia's Donggi Senoro tender, for two cargoes delivered within the May-June window, was that it had been awarded to a portfolio player in the low $4s/MMBtu DES, several sources said. However, it was unclear how many of the cargoes had been awarded.

The recent sale of Petrobras' Gladstone LNG cargo loaded aboard the Cool Runner to a buyer in the Middle East also indicated the weak demand from North Asia as cargoes originating in the Asia Pacific were having to be sold out of the region.

Demand remained centered in the Middle East and India, with buyers in the Middle East expected to have incremental summer demand over the next few months.

Meanwhile, Indian companies continued to absorb spare volumes from the spot market, despite the resolution of the Petronet and Rasgas contract, which had led many to believe Indian spot demand would disappear in 2016.

India's Gail showed that Indian demand was still very much alive, issuing a tender Thursday seeking four cargoes for April, May and June delivery. The tender closes April 1, with validity till April 4.

But although North Asian demand remained subdued, availability of cargoes being offered was also limited as sellers held back on marketing volumes that they had submitted into buy tenders in the Atlantic.

Sources were expecting additional volumes from unsuccessful sellers into the Argentina and Mexico buy tenders to eventually be offered in the spot market.

Underlying sentiment also seemed to remain bearish further out, on the prospects of additional supply from new LNG projects hitting the market.

The Angola LNG liquefaction facility, which has been shut since April 2014, may come back online by the end of this month, sources said.

Initial indications that the plant startup was imminent were shown by ship data, as the Sonangol Sambizanga was moving back to Angola LNG's plant in Soyo.

The vessel would most likely arrive at the terminal on April 15 according to the captain's entry, cFlow, Platts trade flow software, showed. But it was unclear whether the plant would have a full cargo stored in tank to load once the vessel arrived.

In other news, Clean Ocean, which loaded a second cargo from the Cheniere-operated Sabine Pass LNG export plant in Louisiana and left on March 15, was on course to arrive in the Middle East or Asia.

--Max Gostelow, max.gostelow@platts.com
--Edited by Jeremy Lovell, jeremy.lovell@platts.com

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