Breaking News

LNG: August prices weaken on poor Asian demand

By Prince Okafor With Agency Report

Asian spot Liquefied Natural Gas (LNG) prices eased slightly last week as many traditional buyers remained on the sidelines and traders instead turned their focus to tenders in India.

According to Reuters, spot prices for August delivery LNG-AS edged down five cents to $5.40 per million British thermal units (mmBtu).

It disclosed that with North Asian buyers from Taiwan to Japan staying out of the market, the only demand from the region came from South Korea’s Komipo, which bought a July-delivery cargo for about $5.60 per mmBtu, according to traders.

Instead, the market was looking at demand from South Asia, where India’s Gujarat State Petroleum Corp (GSPC) re-issued a cancelled tender.

The Indian firm is now seeking an August cargo after it saw Indian Oil Corp (IOC) purchase an August cargo in the low $5 dollars per mmBtu, a Singapore-based trader said.

“There’s hardly any demand (from North Asia). People are still offering July cargoes and that’s pretty bearish for the market,” the trading source said. Angola’s LNG put an August-loading cargo up for sale, traders said. The cargo loads August 8-10 and the tender closes on June 21.

Jordan’s National Electric Power Company paid in the mid $5 per mmBtu for an August cargo it sought in a tender, traders said.

Exxon Mobil sold a cargo loading in late June to early July from Australia’s giant Gorgon liquefaction plant to China’s CNOOC for $5.60 per mmBtu, traders said. Meanwhile, the Nigeria LNG Limited stated that its plan to construct Train Seven and Eight would be scuttled should the House of Representatives succeed in amending the NLNG Act.  According to the company, the amendment of the Nigeria LNG Limited (NLNG) Act (Fiscal, Guarantees, Assurances, and Incentives) by the House of Representatives on May 9, 2017 will subject the company to more than just the three per cent Niger Delta Development Commission, NDDC, levy due to the removal of the Guarantees and Assurances in the Act.

Dr Kudo Eresia-Eke, General Manager, External Relations, Nigeria LNG Limited, stated in a statement: “The complete removal is a huge error and it is inimical to the growth of Nigeria and a direct collision with the Federal Government’s drive to attract Foreign Direct Investment, FDI. The main thrust of the Guarantees and Assurances were to assure the foreign investors that their investments would be protected by the non-amendment of the NLNG Act.”

He pointed out that from an initial investment of US$6.0billion, the company now has an asset base of over $11 billion, generated over $90 billion in revenues, grown from one to a six-train operation, with a nameplate capacity of 22 million tonnes per annum (mtpa).



Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.