PERTH: Asian liquefied natural gas (LNG) spot prices rose slightly above $17 per million British thermal units (mmBtu) this week as a cold snap in North Asia boosted purchases.
“We’re seeing a lot of prompt (buying) activity... prices have picked up,” one Singapore-based market source said.
LNG prices for February cargoes were pegged around the $17.20 per mmBtu level.
PetroChina, China’s largest oil and gas producer, said this week it would buy an additional 400m cubic metres of LNG from the spot market for the first quarter to meet increasing winter demand.
Last week, China, the world’s fourth-largest gas consumer, asked its energy firms to boost natural gas supplies as some parts of the country reported shortages.
Japan’s LNG demand is also expect to rise, with weather in the world’s largest LNG importing country colder than normal from January through March.
Japanese power demand rose 0.8 percent in December from a year earlier, marking the second straight year-on-year gain, as colder-than-normal weather pushed up heating demand, a Reuters calculation based on industry data showed.
The rise came despite widespread power conservation after the March 2011 quake and tsunami triggered a radiation crisis at Tokyo Electric Power’s Fukushima Daiichi plant, badly hitting public confidence in nuclear energy.
LNG freight rates, which typically rise in tandem with spot prices, have also moved up, with rates at around $120,000 per day for spot tankers, according to Arctic Securities in Oslo.
On the supply side, LNG producer Egypt announced plans to issue a tender to import gas to meet summer demand. In October, the country said it had agreed to import gas from Algeria and was in talks with Qatar for a similar deal.
Egypt has two LNG plants and a gas export pipeline, but industry sources say the government has diverted some gas contracted for export to the domestic market, which faced fuel shortages and power cuts in the summer.
Reuters
