News Details
Spot LNG prices gained some strength back of rising demand
Depleted Japanese LNG storage, rising LNG demand from the Chinese and the Indian buyers and strong oil prices led largely to strengthening of Asian spot LNG prices during last week discounting some corrective measures. Spot LNG prices increased by a dollar last week to $14 from around $13 from the previous week.
The state-owned GAIL India Ltd closed a buy tender on Sept 21 for a cargo to be delivered late in Oct to its 5mil mt/year Dabhol terminal.
At the beginning of last week, Chinese major Sinopec awarded a buy tender on ex-ship basis for more than 25 LNG cargoes to be delivered from Oct 2023 to Dec 2024, largely covering the winter demand for China. Around 13 of the total number of cargoes were scheduled for delivery during the winter months of 2023- starting from October.
The latest data on LNG inventories from the Japan's Ministry of Economy, Trade and Industry (METI), shows that LNG storage with major Japanese utility companies fell to 1.62 million tons as of Sept. 17, lower than the 5-year average for the period. Increased use of LNG by the Japanese utilities was mainly attributed to warmer than usual weather conditions in Japan.
On the supply side, a deal reached between the US major Chevron and the workers union in Australia and resumed piped gas supply from the Norwegian platform, helped reduced a bit of a pressure on spot prices.
Last Friday, Chevron agreed to Fair Work Commission, Australia recommendations, ending more than two weeks long strike by the workers. Chevron’s Gorgon LNG and Wheatstone LNG projects which exported around 27.5mil mt/year LNG in 2022- around 7% of the total global supply, somehow managed to maintained LNG production and export during the workers’ strike. Chevron had no other option but to reach an amicable solution with the workers to maintain LNG export.
In Europe, resumed gas production from Norway's Troll A platform in the North Sea also ease the supply trouble for the Europe. Operator of the platform Equinor announced late last week that the Troll A platform had resumed production following extended maintenance, with full output expected over the next several days as pipelines gradually fill up. Troll A is the platform used to produce gas from the Troll field, Western Europe's largest, with a daily capacity to deliver up to 125 million cubic metres (mcm) via pipelines to Europe.
Containing about 40 percent of total gas reserves on the Norwegian continental shelf (NCS) the Troll field represents the very cornerstone of Norwegian gas production. Equinor is the operator of the Troll A, B and C platforms and the landfall pipelines, whereas Gassco is the operator for the gas processing plant at Kollsnes on behalf of Gassled.
editor@lngworldwide.com