Global LNG prices slip as Nigeria shakes off output problems

*An LNG vessel.

*An LNG vessel.

Oscarline Onwuemenyi,
with agency reports

03 September 2016, Sweetcrude, Abuja – Asian liquefied natural gas (LNG) prices fell in a slow week as traders awaited the outcome of two tenders and Argentina turned away shipments due to mild weather curbing demand.

Nigeria LNG shook off production disruptions caused by a pipeline leak last month with vessels now leaving the plant regularly.

“The September loading programme shows no disruption to supply,” one source said.

In mid-August the plant canceled cargoes earmarked for project stakeholders, including 4-5 cargoes for Shell, 1 for Enel and 2 for Total, trade sources said.

A major tender expected from Egyptian Natural Gas Holding (EGAS) to buy 120 cargoes for 2017, which sources said could be launched this weekend, was the market focus.

Bids under the Brent-priced tender will be due by October and awards are to be finalised by the end of November at the latest, one trading source said.

“They are trying to extend credit terms to 120 days,” he added. In December EGAS extended payment terms to 90 days from the previous 15 days due to a foreign currency crisis.

Asian spot prices for October delivery traded at $5.30 per million British thermal units (mmBtu), 20 cents below last week’s levels, trading sources said.

Gail India is set to award a purchase tender for one October cargo on Friday, while Exxon Mobil’s Papua New Guinea LNG export plant is offering a cargo loading in late September.
Several cargoes changed hands in tenders.

Indian Oil Corp bought two for October, and Conoco Phillip’s Darwin project in Australia sold one each to Trafigura and Gunvor on a free-on-board basis, at $5.10 per mmBtu, traders said.

BP sold a October cargo to Turkey’s EGE Gaz for around $5.20 per mmBtu, trade sources said.

On supply, Indonesian liquefaction plants at Bontang and Donggi Senoro offered additional shipments to their long-term partners and possibly spot buyers.

The giant Gorgon facility in Australia is also set to offer more cargoes though spot tenders. The second production line at Gorgon is due to start up in the fourth-quarter and the third is to begin in the second-quarter 2017, a Chevron spokesman said.

Angola LNG, shut for maintenance since July, may resume output before late September as two vessels, the Lobito and Soyo, are due to arrive at the plant by mid month, shipping data shows.

Algeria’s Sonatrach was still heard offering cargoes for October loading, traders said.

Argentina’s state-run buyer Enarsa said it had canceled one shipment and delayed three cargoes until next year because of one of the warmest Augusts in a decade.

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