Cargoes -both long term and spot

Thursday, 01 April 2021
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There were several cargo deals concluded or under negotiation recently, both for long term and spot market supply.

In the long term sector, Total and Shenergy Group have signed binding agreements for the supply of up to 1.4 mill tonnes per annum of LNG from the French energy major, as well as for a joint venture to be set up to expand LNG marketing in China.

The joint venture (Total 49%, Shenergy Group 51%) will sell LNG, supplied by Total, to customers in Shanghai and throughout the neighbouring Yangtze River Delta regions, one of the main LNG markets in China. In addition, Total will supply LNG to Shanghai Gas, the natural gas subsidiary of Shenergy Group, for its distribution business.

LNG for the joint venture and Shanghai gas distribution business will be sourced from Total’s global LNG portfolio through a long-term LNG Sale and Purchase agreement (SPA) ramping up to 1.4 mill tonnes per annum for 20 years.

The gas will be delivered to Shenergy’s Chinese LNG terminals.

Sinopec deal

Remaining with China, China Petroleum & Chemical Corp (Sinopec) has signed a long term SPA with Qatar Petroleum (QP) to purchase 2 mill tonnes per annum of LNG for 10 years.

Zhang Yuzhuo, Chairman of Sinopec, said that the long-term LNG contract with QP was a first and of significant importance: “We look forward to further co-operation with Qatar Petroleum in the future. Sinopec has always advocated for the development of green and clean energy and the long-term LNG supply agreement will not only meet the needs of the Chinese market but will also demonstrate Sinopec's commitment to a low-carbon, green, safe, responsible and sustainable development path,” Zhang commented. “We firmly believe that it's the responsibility of the entire industry and every company to reach peak carbon emissions and achieve carbon neutral, which is needed for the industry's transformation and development.”

In the spot market, Pakistan is seeking a further eight spot LNG cargoes.

State-owned Pakistan LNG has released a new tender inviting firms to submit bids for the eight cargoes for delivery over the April/June period.

Pakistan LNG offered eight windows for the cargo deliveries, according to the tender document posted on its website, the first of which was 30th April.

Argentina's state-owned energy company Ieasa has received offers from 14 companies to supply 24 LNG cargoes at an average price of $6.50 per MMBtu.

BP was awarded 15 cargoes, followed by Gunvor with five, two to Total, while Naturgy and Trafigura received one cargo each.

All the offers are expected to be awarded for a total $330 mill, according to the Argentine energy secretariat.

The cargoes will be delivered during the winter months at the Escobar regasification terminal in Buenos Aires province.

Elsewhere, neighbouring Brazilian Mines and Energy Ministry has granted permission to Shell and domestic steel producer Gerdau to import LNG, according to the official gazette.

It has authorised the companies to import a total of 36.5 mill cu m and the permit is valid through 31st March, 2024.

The official gazette also said that Royal Dutch Shell’s local subsidiary is to import LNG from various other countries into the Brazilian market.

Shell is expected to import LNG by ship and then sell the LNG to the thermal power plant operators, gas distributors and consumers in the unregulated gas market. 

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