Save for later Print Download Share LinkedIn Twitter Northeast Asian spot LNG prices have jumped $1 to $12 per million Btu, according to World Gas Intelligence assessments for deliveries four to eight weeks ahead -- almost $10/MMBtu higher than they were this time last year (WGI Jun.17'20). Spot prices in Southwest Europe were assessed 80¢ higher at $10.20/MMBtu. The UK National Balancing Point (NBP) day-ahead price was assessed 93¢ higher at $10.02/MMBtu while the ICE NBP July front-month contract leapt 77¢ to $9.91/MMBtu. Netbacks for Mideast sellers in Asia were about $1.80/MMBtu higher than in Southwest Europe, while UK/Belgian netbacks were around $2.10/MMBtu lower than in Asia. Asian spot prices were lifted by a combination of stronger European hub prices, reduced supply from Australia, where Ichthys remains off line following maintenance, and higher-priced deals in Platts’ Japan-Korea Marker window. Vitol bought a Jul. 25-29 cargo from Gunvor for $11.65/MMBtu, while BP secured a Jul. 14-18 cargo from Trafigura at an average of the Dutch TTF July price plus $1.85/MMBtu. Demand is expected to remain stable in South Korea, despite the continued closure of the Shin Kori-4 nuclear reactor after a fire last month. “The impact is minimal as other nuclear units will come on line earlier than expected," a source says. State-run Kogas envisages very high inventories in the third quarter, meaning there will be little room for spot shipments until November -- "perhaps two or three cargoes, tops," the source adds. But India could offer more price support as it emerges from a devastating second wave of Covid-19. “While demand is improving slightly, high prices remain a matter of concern, especially in the power sector," a source says. Another source agrees, saying "there is no market at current prices” (LNGI Jun.10'21). On the buy side, Thailand’s PTT secured a first-half July cargo priced above $12/MMBtu. Korean steelmaker Posco is understood to be seeking a cargo for the second half of July, while Bangladesh’s RPGCL has issued a tender for a mid-July cargo that closes on Jun. 22. In Kuwait, state-owned KPC is seeking a Jul. 5-6 commissioning cargo for its 22 million ton per year Mina al-Zour onshore terminal. The tender closes on Jun. 14. On the sell side, India’s Gail is offering three f.o.b. cargoes loading next year from Cove Point in the US. Loading dates are Feb. 10-19, Mar. 11-20 and Apr. 1-10. The tender closes on Jun. 14. Spot prices also jumped in Southwest Europe, driven by stronger hub and carbon prices. An outage at Norway’s Karsto gas-processing plant has removed nearly 20 million cubic meters per day from the country's gas system. That has tightened European supply at a time when storage remains low, which "certainly had an impact on pricing,” one trader says. On the buy side, Argentina’s state-run IEASA has been seeking eight cargoes for delivery between Aug. 4-Sep. 30, seven for Escobar and one for Bahia Blanca. Offers are due by Jun. 15. “Argentina has awarded some of these, so there will be a clearer reflection of where the market is at later this week,” a broker says. Traders are also eyeing more opportunities in Brazil after low rainfall reduced hydropower output, another source says. The country is currently paying a premium to TTF prices for its LNG. On the sell side, Egyptian Natural Gas Holding Co. issued a tender for one cargo loading on Jul. 26-27 from the Royal Dutch Shell-operated Idku. The tender closes on Jun. 16. That suggests a more positive outlook for Egypt's LNG industry. State-owned Egyptian General Petroleum Corp. had talked in May of selling four to six cargoes for May and June delivery -- but warned that it might shut both of Idku's two trains from May to September if there were no takers. Swiss trader Gunvor has reportedly been loading an Egyptian cargo, while two cargoes headed to India and Bangladesh earlier this month, according to data provider Kpler. Marc Roussot, Singapore, Yousra Samaha, Dubai, and Tom Pepper, London Indicative Natural Gas Prices ($/MMBtu) Jun 14 One Week Ago Year Ago Indicative LNG Prices NE Asia LNG 12.00 11.00 2.20 SW Europe LNG 10.20 9.40 1.90 UK NBP Spot 10.02 9.09 1.83 ICE NBP Prompt 9.91 9.14 1.81 US HH Spot 3.28 2.98 1.46 Nymex HH Prompt 3.35 3.07 1.67 Source: WGI assessments of spot prices for LNG in NE Asia
