Singapore — Asian spot prices for liquefied natural gas (LNG) fell to a three-week low this week as cargoes were offered against little buying interest despite the approach of summer, when warmer weather typically boosts power generation demand.
Spot prices for July delivery to Northeast Asia LNG-AS slipped to $5.35 per million British thermal units (mmBtu), down 30 cents from the previous week, several industry sources said.
Prices for cargoes delivered in June are estimated at $5.30 per mmBtu, also down 30 cents from a week ago, they said.
Several LNG sellers offered cargoes, overshadowing limited buying interest from Pakistan and Mexico, they said.
“The European gas prices fell overnight, so that’s dragging down Asian prices as well,” a Singapore-based trader said.
Day-ahead prices at the Dutch TTF hub fell on Thursday on lower gas demand in continental Europe, while the spread between the Asian and European markets narrowed this week with offers for delivery of cargoes from the United States to Europe in June and July, sources said.
There were several sell tenders this week, with Egypt’s natural gas company (EGAS) offering up to 13 cargoes for loading from its Idku plant over June and July.
Angola LNG offered its second cargo this week for delivery in June, after earlier offering a cargo for late May to June delivery, trade sources said. Oman LNG has also indicated that it will have six cargoes to sell for loading over June to September.
Australia’s Ichthys LNG plant may be offering a spot cargo, while Algeria’s Sonatrach may be offering a cargo through private talks, traders also said.
Indonesia’s Pertamina has offered five LNG cargoes after the country’s monthly exports of the fuel dropped in April to its lowest in two years. The reason for the drop in exports was not immediately clear.
Downside pressure on prices was limited by the shutdown of a pipeline for repairs in Malaysia and several buy tenders.
Malaysia’s state oil and gas company Petroliam Nasional Bhd has temporarily shut the Sabah-Sarawak pipeline that feeds gas to its LNG complex at Bintulu in the state of Sarawak, which is expected to curb spot exports from the plant.
Pakistan is seeking five cargoes for delivery over July to September, while Mexican utility CFE and Chilean consortium GNL Chile are also seeking cargoes for delivery over May to August, industry sources said.
Chinese buyers were also in the market for the third and fourth quarter but at heavily discounted prices, indicating the demand may not be firm, a Singapore-based trader said.
A South Korean company was also seeking a cargo for July, the trader said.