LONDON, May 10 (Reuters) - Asian spot liquefied natural
gas prices rose this week on stronger demand amid high
temperatures in north and south China, pushing European buyers
to bid at relatively narrow discounts to attract sellers.
The average LNG price for June delivery into north-east Asia
rose to $10.50 per million British thermal units
(mmBtu), from $10.40/mmBtu in the previous week, industry
sources estimated.
"We have seen Asian and European prices rise higher, mostly
following news of the Gorgon LNG outage," said Ryhana Rasidi,
LNG analyst at data analytics firm Kpler.
"However, we estimate the impact of the outage to be limited
in the short term and downward pressure is expected on prices
due to the low-demand shoulder season in Europe and Northeast
Asia, where gas/LNG stocks remain sufficient for now," she said.
Chevron Australia said last week it was working to resume
full production at its Gorgon gas facility after a mechanical
fault caused one LNG production train to go offline. Analysts
expect the affected production train to be offline for up to
five weeks.
However, South Korean and Japanese buyers seemed content to
hold back from the spot market and rely on high terminal
inventories to meet an upsurge in domestic demand, said Samuel
Good, head of LNG pricing at commodity pricing agency Argus.
In the United States, Good said production has risen at
Freeport LNG export terminal, with feedgas supply levels in
recent days suggesting the equivalent of two trains at the
three-train facility were operating at near-capacity.
"Nominated supply for Thursday was greater than this,
implying that three trains were already - or close to being -
operational though not all at capacity. That said, this has been
partially offset by the start of maintenance at the country's
Cameron terminal, which is understood to be planned downtime,"
he added.
In Europe, gas storage facilities were last seen nearly 63%
full, leaving the continent in a strong position during the net
injection season.
S&P Global Commodity Insights assessed its daily North West
Europe LNG Marker (NWM) price benchmark for cargoes delivered in
June on an ex-ship (DES) basis at $9.587/mmBtu on May 9, a
$0.19/mmBtu discount to the June gas price at the Dutch TTF hub.
Argus assessed the June delivery price at $9.60/mmBtu, while
Spark Commodities assessed it at $9.548/mmBtu.
LNG freight rates lacked direction again this week with
rates in both basins drifting slightly lower - the Atlantic spot
rate estimated at $42,000/day on Friday and the Pacific spot
rate at $45,750/day, said Henry Bennett, chief operating officer
at Spark Commodities.
Argus' Good said continued low spot charter rates, and a
substantial list of open carriers on offer in the prompt market,
have cut the opportunity cost for subletting spare shipping,
with delivery to Asia instead of Europe generally offering the
potential to such firms to recoup at least some of their fleet
costs.