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Production curbs in Australia result in higher Asian LNG prices

SINGAPORE (Reuters) - With production curbs in Australia boosting the demand, Asian spot prices for liquefied natural gas (LNG) edged higher this week. Spot prices for July delivery to Northeast Asia <LNG-AS> are estimated to be $4.30 to $4.40 per million British thermal units (mmBtu), up from $4.25 last week.

Prices for August delivery are estimated at $4.70 to $4.90 per mmBtu, they added.

Spot trading for the super-chilled fuel was volatile this week with prices moving quickly from opening to closing of the market within a day, a Singapore-based industry source said.

"The TTF/JKM spread has widened since (Thursday) and the arbitrage is open again," the source said, referring to the difference between gas price at the Dutch TTF hub and the Japan-Korea marker price assessed by price agency S&P Global Platts.

Higher oil prices could also be supporting, as majority of the LNG contracts are priced off Brent crude oil, the sources added.

Brent crude oil prices extended gains on Friday following attacks on two oil tankers in the Gulf of Oman that stoked concerns of reduced crude flows of the commodity through one of the world's key shipping routes.

There has been no immediate impact on LNG tankers yet, a shipping source told Reuters.

Australia's Woodside Petroleum bought several cargoes in the spot market as it has extended a planned maintenance at its Pluto LNGplant after technical problems when restarting production, industry sources said.

South Korea's GS Energy also bought a cargo for late July to early August delivery at $4.50 to $4.70 per mmBtu, they added. SK Energy may also be looking for a cargo for the same period, one of them said.

Still, the market is well supplied with new LNG exports from Australia and the United States, the sources said.

Cheniere Energy Inc said on Thursday the second liquefaction train at its Corpus Christi LNG export terminal in Texas had started producing LNG.

Looking at all the terminals under construction, total U.S. LNG export capacity is expected to increase to 7.4 bcfd by the end of 2019 and 10.0 bcfd by the end of 2020, up from 5.7 bcfd now.

The first three liquefaction trains at Freeport LNG's Freeport liquefied natural gas export terminal in Texas are also expected to enter service in September 2019, January 2020 and May 2020, according to a report on Thursday from federal energy regulators.

Royal Dutch Shell shipped the long-awaited first cargo of from its massive Prelude floating LNG plant off northwest Australia earlier this week, also adding to the supply.


Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

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FEATURED COLUMNS

Editorial Comment
-Adrienne Blume
The $26-B small-scale LNG market is gaining exciting traction this year.
Regional Focus: Singapore moves closer to becoming a global LNG trading hub
-Eugene Gerden
Amid strong demand for LNG in the Asia-Pacific region and the need to secure regular gas supplies on a large scale, Singapore may become a major regional hub for LNG trade.
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-Adrienne Blume
For the third time in its 47-yr history, Gastech is returning to Houston, Texas.


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