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Chinese trucked LNG price hit by improved Central Asia flows, looming New Year

Singapore (Platts)--8 Feb 2018 1058 pm EST/358 GMT


Chinese domestic trucked LNG prices have fallen this week because of improved gas flows from Central Asia and despite cold weather, market participants said, adding the upcoming Lunar New year was also a factor.

Greater volumes through Central Asia pipelines have been recorded since last Friday, days after China National Petroleum Corp announced a near 50% cut in gas delivery for downstream non-residential usage on January 31.

The higher gas transmissions alleviated tightness in supply in north China, causing domestic trucked LNG prices to fall, sources said. Average domestic trucked LNG prices in China fell 19% over four days to 5,693 Yuan/mt ($899/mt) Wednesday, according to Shanghai Petroleum and Natural Gas Exchange, which monitors trucked LNG transactions from 50 LNG terminals and factories.

The fall in domestic prices reversed rises seen after the CNPC announced the reduction in gas deliveries. A weaker domestic LNG market could dampen the appetites of Chinese importers to replenish LNG inventory levels ahead of the Lunar New Year holiday in the middle of the month.

Since the CNPC cutback, the government was said by sources to be in talks with Turkmenistan about the resumption of gas supplies.

Participants also attributed tepid industrial activity ahead of the Lunar New Year holiday as a major contribution to falling trucked LNG prices.

"Trucked LNG suppliers are clearing away stocks ahead of the Lunar New Year, logistics and procurement activity simply come to a halt," one Chinese end-user said.

--Shi Yun Fan, shiyun.fan@spglobal.com

--Edited by Dan Lalor, daniel.lalor@spglobal.com




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