By Emily Chow
SINGAPORE, Feb 24 (Reuters) - Asian spot liquefied
natural gas (LNG) prices eased this week, extending declines to
its lowest since July 2021, as demand from key buyers in
northeast Asia remain weak.
The average LNG price for April delivery into northeast Asia was at $15 per million British thermal units (mmBtu),
industry sources estimated, down $1, or 6.3%, from the previous
week.
Asia's spot LNG prices have been trending downward since
mid-December, and have lost 46% since the start of the year.
"Asian LNG prices have indeed been fairly flat with a slight
downtrend this week ... returning to a discount against the
TTF," said Ryhana Rasidi, gas and LNG analyst at data and
analytics firm Kpler, referring to Europe's gas price at the
Dutch TTF hub.
"We see this pressure on prices due to the high stock
levels, ample spot supply availability and limited buying
interest from the northeast Asian buyers."
Amid the lack of spot market demand from northeast Asia,
China Gas Holdings announced on Friday that it had signed two
20-year LNG supply contracts with U.S. exporter Venture Global,
for a total supply of two million tonnes per year.
Earlier this month, China's Unipec also secured a deal with
Oman LNG for around one million tonnes of LNG per year for four
years starting 2025.
"China has been active on a forward looking basis, securing
more long-term volume," said Toby Copson, global head of trading
at Trident LNG.
"This is well positioned to take advantage of current
weakness, while overall demand appears lacklustre."
Lower spot prices however have continued to encourage buying
interest from south Asia. Earlier this week, India's largest gas
distributor GAIL (India) Ltd issued a buy tender seeking three
LNG cargoes for delivery from March to May.
Petronet LNG, India's top gas importer, also issued a buy
tender this week seeking one LNG cargo for delivery in May.
"There is little interest in purchasing spot cargoes
emanating from South Korean and Japanese buyers," said Samuel
Good, head of LNG pricing at commodity pricing agency Argus.
"Instead, we're seeing several south Asian buyers coming
into the market, incentivised by the much lower spot prices
compared with most of 2022 and earlier this year."
In Europe, S&P Global Commodity Insights assessed its daily
north-west Europe LNG Marker (NWM) price benchmark for cargoes
delivered in April on an ex-ship (DES) basis at $14.088/mmBtu on
Feb. 23, a historically high discount of $1.575/mmBtu to the
April gas price at the Dutch TTF gas hub, said Ciaran Roe,
global director of LNG.
"The major European gas hubs remained above LNG prices this
week in a pattern that has sustained since mid-January," he
said.
Dutch wholesale gas prices edged higher on Friday on
expectations of increased demand for heating, as temperatures
turn cooler. "The wider scope for a cold snap in northwest Europe and the
Iberian peninsula around the turn of the month was to some
extent offset earlier in the week by stronger Norwegian output,"
added Argus' Good, who assessed the northwest Europe delivered
LNG prices for April at $13.60/mmBtu on Feb. 23.
Meanwhile, LNG spot freight rates gained this week, "driven
by increased spot vessel demand in the Pacific basin," said
Henry Bennett, global head of pricing at Spark Commodities.
Atlantic rates rose on the week to $59,000/day on Friday,
while Pacific rates also increased to $78,500/day.
(Reporting by Emily Chow; Editing by Shounak Dasgupta)
emily.chow.thomsonreuters.com@reuters.net))
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