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SINGAPORE (ICIS) — Asian spot LNG prices surpassed the ICIS TTF benchmark this week for the first time since late June on rising demand in Asia and high stock levels in Europe.
Winter buying activity emerged in Asia with Indian and Japanese buyers active in the market, as the end of October looms. Inventory levels remain high.
South Korea’s KOGAS awarded as many as five DES buy cargoes for delivery in mid-December to end-January.
The ICIS East Asia Index (EAX) premium to the ICIS TTF benchmark widened at the start of the week, then narrowed. The premium on 26 October was $0.65/MMBtu.
Stable LNG supply, wind output and high inventories are factors pressuring the TTF prompt price. The TTF front-month rebounded slightly to attract ships away from Asia.
Tender Watch
Egyptian EGAS issued an FOB tender due on 27 October for two cargoes with 7-8 and 11-12 November loadings from the Damietta.
EGAS also awarded a sell tender that closed on 25 October for 1-2 November loading from Idku and on 7-8 November loading from Damietta. Winners are TotalEnergies and BP, respectively.
Indian firm Gail issued a swap tender that closes on 27 October. Gail is offering two FOB cargoes loading from Sabine Pass on 27 December and 11-20 January in exchange for two DES cargoes to Dahej between 24 November and 10 December and 1-10 January. A similar tender that closed on 20 October was not awarded.
Columbia’s Calamari is seeking a partial cargo delivery of 46,000cbm between 1-30 November into its Cartagena de Indias terminal. The tender closes on 27 October.
Indian utility Torrent Power bought from a trading house at low $20.00s to Dahej for end-October delivery.
Japanese utility Kansai Electric likely sold a cargo at around $1.00/MMBtu premium to a northeast Asian marker for 20 December.
Floating Infrastructure
Germany has signed a five-year contract to charter the floating storage and regasification unit (FSRU) 138,000cbm Excelsior from the first quarter of 2023 from US-based Excelerate Energy, the shipowner said on 25 October.
The vessel is expected to be placed at Wilhelmshaven after being sent to dry dock for maintenance later in 2022.
Some of the floating storage vessels that had been waiting offshore Spain or in the Mediterranean are now heading north to deliver into northern Europe, although there remain many more still acting as floating storage.
Japanese Demand
LNG inventories at Japan’s major power utilities rose 1.6% from the previous week to 2.56m tonnes as of 23 October. This remains higher than the five-year LNG inventory average of 1.84m tonnes.
Japanese temperature outlook in the coming month shows a 40% chance of colder than normal weather, with Hokkaido and southern Japan potentially seeing a 40% chance of warmer than normal temperatures.
Qatar’s New LNG Partner
Shell has been selected for 9.375% participating interest in Qatar’s 16mtpa North Field South (NFS) expansion project. QatarEnergy will hold 75% out of the NFS project, while Shell and other international partners will hold the remaining 25%.
Portfolio Major’s Forecast
UK major Shell forecast Q4 LNG liquefaction volumes at 7.0-7.6m tonnes, compared to 7.24m tonnes in Q3, which also saw lower LNG volumes due to the impact of maintenance and the Permitted Industrial Actions at Prelude LNG in Australia.
French major TotalEnergies said that it expects an average LNG selling price for Q4 to be above $17.00/MMBtu, according to its third quarter earnings release on 27 October.
Prelude Maintenance
Shell’s 3.6mtpa Prelude plant in Australia has started maintenance for approximately 20 days, according to market sources. No more vessels are scheduled to load at Prelude for now, according to ICIS LNG Edge.
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October 29, 2022 at 02:41AM
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East Asia Spot LNG Price Surpasses TTF for Winter - Natural Gas Intelligence
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