04-06-2016

July Platts JKM LNG cargoes rise 20 cents to $4.90/MMBtu on tighter supply

LNG

Platts JKM for July-delivery LNG cargoes ended the Asian trading week at $4.90/MMBtu Friday, up 20 cents/MMBtu on the week as spare supplies in the Asia region were sparse, and bids and offers edged up on the back of higher NBP and firmer crude oil prices.

Volumes from both the Gorgon and Angola LNG projects for July delivery were starting to look less certain, after first cargoes were unable to load in May, with some traders and portfolio suppliers being forced to enter the market to purchase cargoes to backfill short positions.

At the same time, offers to the region jumped to levels above the $5/MMBtu mark. Bids from traders and end-users were heard rising to $4.70/MMBtu in order to compete for the few available cargoes. Similar indications were heard further out for August, although trading for that month had yet to start in earnest.

This tightness led into more competition into Australia’s North West Shelf tender. The tender offering two cargoes on either FOB or DES basis for June 26-30 lifting, was heard to have been awarded at a higher price than expected, although this could not be confirmed.

In the Atlantic, Egypt’s Egas issued a tender seeking 11 cargoes over June to August, a number of sources said. The tender closes June 2 with validity until June 7.

Very few buyers viewed the most recent tender from Egypt’s Egas as having a material impact on prices, as parties had already anticipated more demand to emerge from Egypt during the period.

On the supply front, some additional volumes could still emerge from the Asia region to ease the tight market conditions. In the Pacific basin, Indonesia’s Donggi Senoro was offering a single cargo for delivery in July through a tender that closed Friday, with validity until June 10.

Source: Platts

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