Prices Ease Though Argentine Demand Limits Losses

Argentina tenders for 19 cargoes.

Asian spot prices for liquefied natural gas (LNGLF) (LNG) eased under pressure from growing supplies though fresh demand from Argentina limited losses, traders said. LNG for May delivery in Asia eased to $4.50 per million British thermal units (mmBtu), down 5 cents from the previous week.

Traders said prices were supported by Argentina's tender to buy 19 LNG cargoes for May to August delivery, following a large purchase earlier in the week. Traders said Argentina bought about 20 cargoes on Wednesday from companies including Trafigura, Statoil (STO), BP, Gazprom, Glencore (GLCNF), Gas Natural (EGAS) and Petrobras, having tendered for 32.

The cargoes sold for about $4.50 per mmBtu, they said. "We expect to some additional optimisation activity around Argentina in the coming weeks," one trading source said. Egypt's state-owned EGAS also tendered for supply this week, seeking two cargoes for April delivery.

New supplies from Australia and the United States continued to pick up with Chevron (CVX)'s Gorgon project off the coast of Western Australia expected to ship its first cargo any day with the Asia Excellence vessel moored at the facility. Cheniere Energy (LNG) shipped the United State's second cargo of LNG this week, with another seven to nine cargoes expected to be shipped from its newly commissioned Sabine Pass terminal in the next couple of months - before its long-term offtake agreement with BG Group (BRGXF) starts.

Demand in Asia remained slow with traders noting that storage levels remained healthy although there was some fresh demand from India. Top buyer Japan's imports of LNG totalled 7.433 million tonnes last month, down 3.8 percent from a year earlier, the Ministry of Finance said.

Traders were awaiting the outcome of Taiwan's CPC tender to buy 14 cargoes for May to December deliveries. In January, CPC tendered for 60 cargoes for delivery over five years from 2017 which traders said was awarded to BP.

By Sarah McFarlane and Oleg Vukmanovic