LNG

The prices of spot LNG cargoes declined by around 11 percent during the past week with December 2019 and January 2020 deliveries being quoted at $6.30 per million British thermal units for China and South Korea.

Singapore LNG spot forward cargo prices jumped by as much as 25 percent in the past week as demand improved in Asia and December quotes appeared for shipments for China and South Korea at US$6.650 per million British thermal units.

Singapore LNG spot cargo prices surged by 12 percent in the past week as trading picked up and North Asian shipments for the second half of November were quoted at US$6.000 per million British thermal units.

Singapore LNG spot cargo prices dropped half a percentage point on the week from already low levels with only Asian and Middle East cargoes for delivery in the second half of November maintaining values over US$5.000 per million British thermal units amid ample supplies.

Singapore LNG spot cargo prices drop for Southeast Asia as well as China and South Korea to under US$5.00 per million British thermal units amid a lack of quotes for Dubai and Kuwait cargoes because of security concerns.

Singapore LNG spot cargo prices increased as North Asian shipments moved to higher ground above US$5.00 per million British thermal units and as October quotations arrived in the market.

Mubadala Petroleum, the exploration and production company owned by the emirate of Abu Dhabi in the United Arab Emirates, has signed an agreement to sell Premier Oil of the UK a 20 percent stake in an Indonesian block where Mubadala Petroleum is aiming to discover more natural gas.

The accord will farm-out a 20 percent participating interest in each of Mubadala’s Andaman I and South Andaman Gross Split Production Sharing Contracts (PSCs) to the UK company.

Mubadala Petroleum is the operator of both the Andaman I and adjacent South Andaman PSCs.

The value of the transaction was not given and completion was subject to customary conditions, including government approvals.

The Abu Dhabi company explained that the Andaman I and South Andaman PSCs are located in the under-explored but proven North Sumatra basin offshore Aceh in the northwest tip of Sumatra.

Mubadala Petroleum is also a partner with a 30 percent participating interest in the Andaman II PSC, which is operated by Premier with a 40 percent shareholding.

With participating interests in these three adjacent blocks, Mubadala Petroleum is the largest net acreage holder in the area, securing the core of the North Sumatra basin for future exploration growth.

The UAE company said the PSCs have “the potential to unlock a new material gas play for domestic consumption in North Sumatra and potentially long-term export” to regional markets.

“With this farm-out, Mubadala Petroleum will extend its partnership with Premier Oil for the exploration of the Andaman blocks offshore Aceh,” said Bakheet Al Katheeri, Mubadala Petroleum’s Chief Executive.

“Both partners have a strong commitment to this new high-impact growth area which supports Mubadala Petroleum’s growth strategy of finding and, if successful, developing gas for Indonesia’s growing markets,” added Al Katheeri.

Premier for its part has built a dominant position in the Natuna Sea and delivers natural gas by pipeline into Singapore under long-term gas sales agreements.

The UK company is also seeking to backfill these long-term contracts by bringing onstream more discovered but undeveloped resources on the Natuna Sea Block A.

“Demand from Singapore for Premier’s Indonesian gas continues to be robust with Premier’s Natuna Sea Block again capturing an increased market share,” said Premier in a recent operational update.

The West-East arbitrage window from the Atlantic Basin to the Pacific Basin that some forecast would be closed until October appeared to be in the process of re-opening after European natural gas prices had briefly overtaken those for the Asian spot LNG cargo market.

Pavilion Energy, the Singaporean company owned by the city-state wealth fund Temasek, said it entered into an agreement to purchase the portfolio of LNG assets of Spanish utility Iberdrola, including European regasification capacity in the UK and Spain.

Singapore LNG spot cargo indices began moving higher in the past week and into the second half of July with North Asia shipments leading the way.

The Singapore average index for June increased to US$5.221 per MMBtu from last week’s June average of US$5.035 per MMBtu.

Singapore’s latest LNG indices released on May 2 included a price of US$4.847 per MMBtu for the second half of June of US$5.245 per MMBtu.

Prices were quoted as a surplus in global LNG supplies permeated the Northern Hemisphere summer market as other energy trading products benefited from crude oil prices this week of around $74 per barrel.

Cargo prices for the first half of July were at US$5.335 and were higher for the second half of July at US$5.415.
The Sling is an index series for LNG developed by the Singapore Exchange (SGX) and its subsidiary Energy Market Company (EMC).

It is a spot index for cargoes “on the waters in the vicinity of Singapore which could go into any port” and based on cargo sizes of 135,000 cubic metres capacity to 175,000 cubic metres capacity.

The North Asia price rose to a June average of US$5.506 per MMBtu versus last week’s June average of US$5.305 per MMBtu.

North Asia cargoes for the second half of June were also lower week-on-week at US$5.525 per MMBtu, before rising for the first half of July to US$5.625 per MMBtu, then moving even higher to US$5.730 for the second half of June.

The North Asia prices are for delivery ex-ship (DES) to all ports in Japan, Korea, Taiwan and China.

The Dubai-Kuwait-India Sling index is assessed in collaboration with London-based, inter-dealer global brokerage Tullett Prebon for regional cargoes shipped to India and the Middle East and averaged US$5.353 per MMBtu for June, an increase from last week’s June average of US$5.177 per MMBtu.

The DKI index, based on a cargo of between 138,000 cubic metres capacity and 170,000 cubic metres, is seen in the second half of June at US$5353 per MMBtu before increasing to US$5.490 per MMBtu for the first half of July.

The price for the second half of July jumped to US$5.585 per MMBtu.

The SGX LNG Index Group (Sling) is an initiative by SGX and EMC for spot LNG price discovery.

It is a benchmark based on assessments of LNG cargo value by market participants. They provide assessments based on the value of an LNG cargo at a specific location for delivery.

The Sling is based on participants submitting assessments to determine an index value.

“The participant pool consists of a broad group of market players to ensure that any Sling Assessment is as representative of actual market conditions as possible,” says the SGX, while pointing out that the participant is kept confidential at all times.

The SGX-EMC LNG prices include both lean and rich cargoes.