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LONDON (ICIS) –The ICIS TTF October ’22 contract rose to $66.03/MMBtu on 14 September, up almost 11% day on day.
European Commission President Ursula von der Leyen did not include mention of a price cap on energy imports in the state of the union address on 14 September, which may have supported prices.
The ICIS East Asia Index (EAX) also rose in reaction. Von der Leyen said the commission would instead develop “a set of measures that take into account the specific nature of our relationship with suppliers”.
Asian spot demand for October is expected to be weaker and shipping markets remain tight.
European Price Spreads
In Europe, price spreads to the ICIS TTF contract for LNG deliveries remained wide, sources said, with sellers needing to offload ready to take lower bids.
In northeast Asia, spot demand was still weak mid-week, with Japan LNG’s inventories thought to be sufficient until November.
A private South Korean firm was heard enquiring about November availability, a trader said, but many major buyers remain sidelined, or are instead offering spot shipments. The results of a tender by Malaysian producer Petronas on 14 September also pointed to weaker Asian spot demand for October.
Traders said a Petronas 18-21 October GLNG cargo could have sold at around $36.00-37.00/MMBtu and its 23-26 October PFLNG2 cargo at around $33.00-34.00/MMBtu. The tender closed prior to a same-day TTF rally, but traders noted the few bids have been below printed price levels.
Steelmaker ArcelorMittal Nippon Steel India issued a non-binding term buy tender calling for 0.4mtpa of LNG between 2025 and 2030, traders said. The cargoes are to be delivered to any port in West India including AMNS’ upcoming floating storage unit at Hazira, with tentative delivery months to be February, April, June, August, October and December.
Japanese utility Tohoku Electric was seeking a 1-10 February cargo through a tender closing on 13 September. Inventory levels in the country are thought to be sufficient until November. However, these would need replenishing thereafter, a trader said.
Traders said that it was unlikely Indian energy firm Gujarat State Petroleum Corp (GSPC) would award a buy tender for cargoes for October and November delivery.
Indian gas firm GAIL was in the market for four cargoes for H1 October and November.
In Europe, there are some floating vessels in the Mediterranean, suggesting traders are waiting to see if prices increase and slots open up in higher-priced markets such as Italy or the Netherlands as congestion continues.
The 173,000cbm BW Lilac was placed with Cheniere at $210,000/day. The vessel has commitments in the US Gulf on 27 November.
Shipping interest is likely to emerge around a tender from Egypt’s state-owned EGAS which closes on 20 September. The producer is offering volumes from Damietta LNG facility on 24-25 September or on 29-30 September
Diamond Gas International has secured a ship from Australia’s North West Shelf project to northeast Asia. The 173,000cbm, Woodside Chaney was chartered at $175,000/day.
The 174,000cbm Kool Orca is signaling an estimated arrival date of 16 September to Prelude in Australia. The 3.6mtpa Shell-operated plant has been out of operation since mid-July due to industrial action. Production was thought to have restarted on 11 September.
Local market sources said that LNG terminals in China affected by the recent Muifa typhoon had restored operations from 15 September, with the PetroChina-operated Rudong terminal resuming berthing on 16 September.
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