Asia LNG Prices Lower on Piecemeal Demand

Asian spot liquefied natural gas prices slipped on Friday as disappointing demand weighed on the market, traders said.

 

The price of spot LNG for May delivery eased to $7.50 per million British thermal units (mmBtu) from $7.70 last week.

 

Thomson Reuters Point Carbon analysts forecast the LNG Asia spot price at between $7 and $9 per mmBtu for this summer.

 

"Disappointing demand growth from main LNG importers and increasing supply from producers in Asia Pacific have put the Asian LNG spot price under significant downward pressure," the analysts said in their summer outlook.

 

Top buyers Korea and China have seen lower than expected LNG imports in the first quarter.

 

"I think it's a combination of everything; alternative sources, the growth of their economies slowing down, and LNG looking expensive," a trader said.

 

The tight price difference between Asia and Europe is expected to draw additional cargoes into terminals in Britain, Belgium and Netherlands, with Thomson Reuters Point Carbon forecasting an additional three cargoes per month over summer.

 

On the supply side, traders were monitoring the situation in Yemen, after Saudi-led air strikes helped to drive up oil prices on Thursday.

 

Traders said the Yemen LNG plant was operating normally on Thursday although they were unable to provide an update on its status on Friday.

 

In Australia, traders said that BG Group (BRGXF)'s Queensland Curtis LNG facility was back in operation after two weeks maintenance and would be ramping up to full capacity, allowing it to ship about one cargo a week.

 

Earlier this week Britain's Isle of Grain LNG import terminal tested export facilities by loading a quantity of fuel onto inbound tanker Asia Vision.

 

India remained one of the brighter spots for demand with Gail looking to buy seven liquefied natural gas (LNG) cargoes for delivery from Oct. 2015 until Dec. 2016, according to the tender document obtained by Reuters.

 

In addition, Pakistan is expecting its first LNG cargo to arrive on March 31, a broker said.