Global LNG Prices Up 10%

Asian spot LNG prices jumped more than 10 per cent last week on bullish tender results, but the rally may lose steam as prices near oil-link contract parity levels ahead of a public holiday in China and South Korea this week. Spot prices LNG-AS for November delivery rose 80 cents to $8.40 per million British thermal units (mmBtu). December contracts are trading at strong premiums to November. Two major tender awards this week underscored Asian markets’ demand. Papua New Guinea LNG (PNG) sold a November cargo at around $8.50-$8.60 per mmBtu, while sales of January and March cargoes fetched a premium, traders said. “January was the highest price in the high $8‘s, slightly below 15 percent of Brent,” a trade source said. PNG launched a four-cargo sell tender recently for two November-loading cargoes and one cargo apiece in January and March. At the same time, Chinese state-run energy giant CNOOC concluded its four-cargo buy tender, paying about $8.40 per mmBtu for November supply. Unexpectedly strong Chinese demand has helped spur spot prices 55 percent higher from their 2017 lows, but some trade sources say PetroChina and CNOOC are well covered until January, potentially moderating price gains. Three Indian prompt buy tenders are currently active. Gujarat State Petroleum Corporation (GSPC) is seeking two cargoes, Gail India wants three across November and December, and Reliance Industries also seeks supply.