HOUSTON (ICIS) — Asian LNG spot prices have fallen this week, with the July ICIS East Asia Index (EAX) down more than 12% on 19 May from one week ago.
The softness in prices, compared with levels seen just a month ago, could attract additional buyers into the market. New demand will be weather dependent and has not yet emerged in full, traders said.
Meanwhile, sources said they are expecting high storage levels and LNG import capacities over the winter in Europe, with new floating storage regasification units (FSRUs) coming online.
Much could depend on the extent to which Europe continues to rely on Russian gas and Asia replaces LNG demand with coal, with some analysts looking to a tight winter globally.
European Commission president Ursula von der Leyen said on 17 May that the new REPowerEU plan will mean the 2030 target for renewable hydrogen production has been doubled to 10m tonnes.
The hydrogen can replace up to 50bcm/year of imported Russian gas. Funds are also being directed to LNG projects that can integrate hydrogen.
State-owned producer Oman LNG issued a sell tender on 18 May. The producer is selling a single cargo on an FOB basis for loading between 26-27 June. The tender closes on 19 May.
South Korean incumbent KOGAS likely awarded at least nine cargoes from a July 2022 to March 2023 tender that closed on 18 May.
Angola LNG has issued a DES sell tender for one cargo with the farthest destination to Japan, South Korea, Taiwan or China from 23 June to 10 July. The tender closes on 24 May.
Japanese utility Tohoku Electric has issued a 20-30 June one-cargo DES buy tender, trade sources said. The tender closes on 20 May.
Prompt Shipping Rates Rise
Prompt shipping rates continue to climb, with sources putting prompt TFDE rates at $60,000/day or above.
The 156,000cbm Wilpride was fixed to Vitol for a rate of $60,000/day for 30 days in June, according to a source.
The 162,000cbm Maran Gas Sparta was chartered out by Qatar Petroleum Trading to a European trading house, two sources said, but no rate was given.
U.S. LNG exports slid to third place in the first half of May, behind Qatar and Australia, LNG Edge data shows.
For the first four months of 2022, U.S. monthly LNG production remained above Qatar.
U.S. Cameron LNG’s Train 1 had a three-week maintenance period that was scheduled to wrap up on 19 May.
Argentina’s state-run gas distributor IEASA is seeking 13 cargoes for the month of July, nine for the terminal at Escobar and four for its Bahia Blanca terminal.
Colombian importer Calamari LNG may be considering a prompt cargo for its Cartagena de Indias terminal for summer demand, but a formal tender has not yet launched.
Maintenance at Qatargas
Qatargas 1 at Ras Laffan had an ongoing shutdown this week due to offshore maintenance, according to market sources.
Trains 1 and 2 are expected to be shut down between 14 and 27 May, while Train 3 is expected to be down from 9 to 29 May.
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