LONDON/PERTH: Asian prices of liquefied natural gas (LNG) steadied at low levels this week due to feeble demand, while Latin American importers continued a more-than-two-month trend of paying premiums to attract supplies.
The price of spot LNG in Asia hovered around $14.25 per million British thermal units (mmBtu) as buyers were well supplied and held off from making additional purchases for June.
A slump in LNG demand from top global buyer Japan has shifted the spotlight from Asia to major Latin American economies Brazil, Argentina and now Mexico, which are seeking to avert energy shortages by increasing imports.
As for supply, Singapore LNG received its first cargo this week as it started commercial operations of its $1.4bn terminal.
The city state has been trying to carve a role for itself as a regional LNG trading hub. The 3.5 mtpa hub will later be expanded to 9 mtpa.
Sellers awaited the results of two big tenders from Latin America before determining how much fresh supply they could offer to Japanese and South Korean buyers.
Mexican state-run firm CFE is due to award tenders to buy about 30 cargoes over 2013 and 2014, and Argentina’s state-run YPF will award tenders for seven cargoes to be delivered this year, trade sources said.
In other Latin American deals, the trading arm of Gazprom delivered a cargo sourced from Egypt to Argentina at a price of $16.25 to $16.50 per mmBtu, Waterborne analysts said. British oil major BP sold a cargo to Brazil’s state-run Petrobras for $15.25-$15.50/mmBtu, while Mexico paid about $15.85/mmBtu to trading house Trafigura for a cargo delivered in April.
In Europe, Portugal’s Galp Energia also recently closed a tender to sell six cargoes, loading from Nigeria’s liquefaction facility at Bonny Island on the Niger Delta. Traders were not able to provide details on the buyer and the terms.
Meanwhile, Norway’s Statoil resumed exports of LNG from its Snoehvit plant in the Barents Sea last week, adding to global supplies.
In Britain, prompt gas prices fell on Friday as low demand and reduced injection into underground storage packed more gas into pipelines.
And in the United States, natural gas futures were little changed early on Friday, with a slight bias to the downside as mild, spring-like weather and after data showed an increase in the weekly inventory. Reuters
