27-01-2018

Platts JKM: Asia March LNG prices retreat to $10.325/MMBtu on easing supply concerns

The Platts JKM for March LNG deliveries slipped 22.5 cents/MMBtu over the week to end at $10.325/MMBtu Friday, as prices edged down on the prompt due to expected recovery from affected production facilities.

However, cold snaps sweeping across Northeast Asia brought back bullish expectations of a price rebound later in the week. Market participants noted that gradually depleting inventory levels as well as US supply issues could trigger a wave of spring buying.

Easing supply concerns over Russia’s Sakhalin, Malaysia’s Bintulu and Angola LNG projects exerted downward price pressure on prompter cargoes.

End-users however also cited potential headwinds coming from additional prompt supply as well as eager sellers hoping to clear away March cargoes before a steep downward correction in April prices.

Japanese utility Tohoku Electric’s buy tender for an H2 March cargo was heard awarded to a portfolio player at around $10.10/MMBtu on Wednesday.

South Korea’s POSCO issued a tender Wednesday seeking a March 2-5 cargo for delivery into Gwangyang terminal. The tender closes January 29, with validity until January 30.

But there was continued supply uncertainty during the week when potential issues at a US project was reported.

In a critical notice Tuesday, Creole Trail Pipeline, which supplies natural gas feedstock to the Cheniere Energy’s Sabine Pass liquefaction facility, said that an unscheduled maintenance would reduce transmission capacity through a critical compressor station from Wednesday to Friday.

In an updated notice Wednesday morning, the pipeline announced an adjustment to the maintenance restriction, modestly easing flows on the pipe through the remainder of the event.

The unscheduled maintenance and its potential reduction in feedgas deliveries to Sabine Pass comes just days after the plant faced an interruption in water supply that slowed liquefaction processes.

India’s BPCL tender seeking a March 14-16 delivery cargo was awarded to a large portfolio player at around $9.90/MMBtu.

GSPC also issued a tender, looking for a DES cargo for delivery into Dahej or Hazira in the first half of February. The tender is expected to close January 24, with validity until January 25.

Also in India, Gail issued a sell tender seeking a single cargo for delivery March 1-17 for delivery into Dahej, according to market sources.

Source: Platts

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