LONDON: Asian spot liquefied natural gas prices were little changed this week as global output showed signs of rebounding amid tame demand from top buyers Japan and South Korea.
Nigeria, which produces about 10 percent of the world’s LNG, boosted exports over the past week after declaring force majeure in May from its 22 million tonnes-per-year terminal due to a leaking gas pipeline.
Nigeria LNG’s general finance manager Victor Eromosele told Reuters on Thursday six cargoes loaded from the plant last week, just one short of the typical weekly export rate. “Supplies are improving,” he said.
The world’s most northern LNG plant at Snoehvit in Norway was also due to restart in a few days, according to a senior official at the facility.
Production at Europe’s only LNG plant has been shut since May 28 after a short circuit tripped the cooling processors.
The small price gain contrasted with potentially higher gas demand to produce power in South Korea after two of its atomic plants were shut last week over safety concerns. Asian LNG prices were pegged at around $14.55 per mmBtu level, up slightly from last week, traders said.
South Korea’s demand for LNG will also depend on summer temperatures, when energy use peaks due to cooling needs. Meteorologists forecast this summer could be unusually hot.
In the Atlantic market, Angola’s long-delayed export plant has finally started producing LNG and the first cargo is due to be exported later this month, potentially adding one or two cargoes to the global market before it shuts down again until August.
Commodities trading giant Glencore Xstrata looks set to enter the LNG market after hiring a four-person team in London and Singapore from Morgan Stanley.
Dealers said the move could trigger a second wave of new entrants keen to exploit price differences between U.S., European and Asian gas markets.
European hub gas prices were at around $9/mmBtu due to low demand compared with Asia, while South American buyers including Brazil and Argentina were paying around $15/mmBtu.
Mexico, Brazil and Argentina imported a total of 102.09bn cubic feet in May, the highest ever monthly figure recorded for the region, according to Waterborne analysts. “The three countries have dominated the global short-term market over the past months in an attempt to secure volumes ahead of the southern hemisphere winter,” Waterborne said.
Reuters
