• Asian LNG prices drop for second straight week on mild winter

    Asian spot prices for liquefied natural gas (LNG) dropped for a second consecutive week as supply flooded the market, overshadowing demand subdued by a winter that has been milder than average.

    The average LNG price for January delivery into northeast Asia is estimated to be about $5.50 per million British thermal units (mmBtu), down 10 cents from the previous week, several industry sources said.

    “It’s still looking pretty bearish for January,” a Singapore-based LNG trader said. “There are some pockets of demand, but way too much supply.”

    Russia’s Sakhalin 2 plant probably sold a cargo for loading on Jan. 22 at $5.70 to $5.90 per mmBtu, an industry source said, although this could not immediately be confirmed.

    Angola LNG offered a cargo for delivery over late January to mid-February in a tender that closes next week.

    GAIL (India) has also offered up to 10 cargoes on a free-on-board (FOB) basis from the Sabine Pass and Cove Point LNG plants in the U.S. for loading from early next year to early 2021, industry sources said.

    In the United States, Cheniere Energy asked U.S. energy and safety regulators to approve a process to return to service a storage tank that leaked at its Sabine Pass LNG export plant.

    The lower spot prices appeared to stoke some demand from China, Japan and India.

    China’s Guangzhou Gas and Japan’s Tohoku Electric Power each sought a cargo for delivery in late January, industry sources said.

    In India, Gujarat State Petroleum Corp (GSPC) is seeking a cargo for delivery in January while Reliance Industries sought a cargo for delivery over the second-half of January, industry sources said.

    Pakistan LNG is seeking a cargo for delivery over Feb. 16 to 17 in a tender that closes on Dec. 17, a tender document showed.

    Still, temperatures in Tokyo, Beijing and Seoul are expected to be mostly warmer than average over the next two weeks, according to weather data by Refinitiv Eikon.

    South Korea’s LNG demand is also set to slow over the next two years, despite a number of coal plant closures, the boss of power company SK E&S said this week.

    Chief Executive Jeong Joon Yu expects at least 10 coal plants to be shut down by spring, but the drop in coal power production will be offset by weaker electricity demand and new nuclear output, he said.

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