Asian cargo enquiries boost forward prices

Thursday, 29 October 2020
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Asian spot LNG prices jumped to their highest in more than 20 months last week on increased buying ahead of a forecast colder winter.

The average December LNG price delivery into northeast Asia LNG-AS was estimated at about $6.90 per MMBtu, up by $1.10 from the previous week.

Prices were boosted by several requirements circulating in Japan, China and South Korea.

For example, China’s Unipec sought 10 cargoes for delivery this winter, while Shenzhen Energy needed a cargo for December delivery, traders told Reuters.

South Korea’s KOGAS was believed to have awarded a tender to buy at least six cargoes for delivery between November to January at just below $7 per MMBtu, while Japan’s Tohoku Electric tendered for a cargo for delivery in late November to early December.

Taiwan’s CPC Corp was thought to have bought several cargoes for delivery in December at close to $7 per MMBtu, a trader said.

In addition, Cheniere Energy was said to have purchased a cargo for delivery in December at about $7.10 per MMBtu, another trader told Reuters.

However, with no cancellations expected from US LNG exporters in December, a potential increase in cargo flows to Asia may cap any price gains, traders warned.

Australia Pacific LNG (APLNG) offered a cargo for November loading, while BHP offered a Northwest Shelf cargo for late November to early December loading, traders said.

Darwin LNG also offered a cargo for loading over late November to early December, while Ichthys LNG sold a November cargo at $6.10 to $6.30 on a free-on-board (FOB) basis.

Russia’s Sakhalin Energy also offered a cargo for loading on 25th December, while Nigeria LNG offered a cargo for mid-November loading.

Gail (India) awarded a swap tender, selling a cargo for loading in January from the US and buying a cargo for delivery into India, the sources said.

No cancellations

The US’ largest LNG exporter, Cheniere Energy, received no December loading cargo cancellations at its two export terminals.

At least 175 US cargoes, due to load between April and November, were thought to have been cancelled, S&P Global Platts figures showed.

US exporters are largely protected by fixed fees received when customers cancel, although cancellations force them to lower production, and if a counterparty were to claim force majeure, that could pose a challenge, Platts said.

Also last week, the first LNGC left Cameron LNG's export plant in Louisiana since Hurricane ‘Delta’ hit the area.

‘Golar Seal’ sailed on 21st October for Fos, according to MarineTraffic.

The previous vessel to arrive at Cameron was ‘SK Audace’ on 4th October, according to Refinitiv data.

The US Coast Guard said it had allowed vessels with drafts of less than 11 m to transit the Calcasieu Channel, as obstructions were cleared from the waterway following ‘Delta’.

In another incident, vessels entering and leaving Sabine Pass had to contend with a grounded rig.

This limited vessels entering the waterway to a maximum draft of 11 m, the USCG said.

Late on 19th October, ‘Palu LNG’ left Sabine Pass with a draft just over 11 m, according to Refinitiv, while ‘Stena Clear Sky’ had arrived. Since then, the ‘Flex Resolute’ was reported to have berthed late last week. 

 

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