Global: LNG -Asian spot prices rally to eight-year seasonal high

Beijing Gas Blue Sky Holdings

06/08/2021 10:32

* Temperatures in N.Asia expected to be higher than average
    * Chinese buyers secure cargoes for Aug-Sept - sources
    * Fire put out at Gazprom's gas condensate plant in Yamal 

    By Sabrina Valle
    HOUSTON, Aug 6 (Reuters) - Spot prices for liquefied natural
gas (LNG) in Asia rose this week to their highest for this time
of the year since 2013, as buyers prepare for more extreme
temperatures amid a supply crunch.
    The average LNG price for September delivery into Northeast
Asia  LNG-AS  was estimated at about $16.90 per million British
thermal units (mmBtu), up $1.30 from the previous week, industry
sources said.  urn:newsml:reuters.com:*:nL1N2P607K
    Demand for LNG, mainly used in thermal plants to generate
electricity, rises during the northern hemisphere summer to meet
air-conditioning needs.
    Temperatures in Beijing, Tokyo and Shanghai are expected to
be higher than average over the next two weeks, increasing
short-term demand for cooling, weather data from Refinitiv Eikon
showed. Additionally, buyers are already securing demand ahead
of winter.
    "Prices usually peak during summer and winter and fall in
between, but the shoulder season effect got squeezed this time,"
a London-based trader said, referring to the period between the
summer and winter demand periods.
    Last winter, spot prices rose to record highs above $33 per
mmBtu amid production constraints in export countries. Europe
has failed to replenish inventories since then, competing for
world spot demand with China, a top consumer with scarce storage
capacity.    
    Beijing Gas bought one cargo to be delivered between Sept.
26-30 into the Yuedong terminal at a price well above $15 per
mmBtu in a tender in which it was seeking three cargoes,
industry sources said.
    China's Shenzhen Energy bought a cargo for Aug. 19-27
delivery to the same terminal at $16.20 per mmBtu, they said.
 urn:newsml:reuters.com:*:nL1N2PB0G3
    PetroChina sold a cargo for delivery into the Fujian
terminal in China over Sept. 4-8 at $16.14 per mmBtu during the
S&P Global Platts' pricing process on Thursday.  urn:newsml:reuters.com:*:nL1N2PC0JL
    A fire at Gazprom's Urengoy gas condensate preparation
facility on the Yamal region on Thursday also supported prices,
traders said.  urn:newsml:reuters.com:*:nL1N2PC1ZJ
    Record exports earlier this year from the United States
helped make up for production disruptions in the East but the
amount of gas flowing to export plants has slipped. Volumes fell
from 10.8 billion cubic feet per day (bcfd) in July to 10.4 bcfd
so far in August. That compares with a record 11.5 bcfd in
April.  urn:newsml:reuters.com:*:nL1N2PB0WU    

 (Reporting by Sabrina Valle, additional reporting by Jessica
Jaganathan; Editing by Christian Schmollinger)
 ((Sabrina.Valle@thomsonreuters.com;))