Price Steady as New Supply Offset by Outages, Demand Prospects
Milan. Liquefied natural gas (LNG) spot prices in Asia were static this week as the region's producers put up six new shipments for sale while price support came from a US outage and potential post-earthquake demand from South Korea.
Prices for October delivery traded only marginally lower at $5.50 per million British thermal units (mmBtu), with November levels around 5-10 cents higher.
On supply, Exxon Mobil offered one October cargo from Australia's Gorgon liquefaction unit. Indonesia's Bontang plant had three shipments for November-December and Russia's Sakhalin II was marketing two November-loading cargoes.
Angola's liquefaction facility is due to return from maintenance this month, with two vessels -- the Lobito and Soyo -- converging on the site.
However, Cheniere Energy is shutting its two-train Sabine Pass production plant in Louisiana for four-weeks of planned maintenance.
On the demand side, Mexico tendered to buy one cargo for Oct. 4 delivery.
Dealers, meanwhile, are watching for signs of LNG demand from South Korea, which took offline four reactors with a combined capacity of 2,770 megawatts after two earthquakes struck the country's southeast.
"There has been little sign of new demand so far, but I suppose it is technically bullish," one LNG trader said.
Glencore sold a cargo to Kuwait for November delivery in the mid-$5 per mmBtu range, traders said.
Another major source of demand is Egyptian Natural Gas Holding (EGAS), now considering offers for a three-cargo purchase tender it launched last week.
EGAS is widely perceived to be readying a long-delayed 120-cargo tender for delivery next year, the world's biggest ever tender, traders say.
Short of US dollars and awaiting cash infusions from the International Monetary Fund and others, Egypt could be delaying the tender until October, traders said.
While concerns over EGAS's ability to pay suppliers are widespread, traders remain confident of a huge tender turnout given its unprecedented scale and glum market conditions elsewhere.
Reuters
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