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LNG: Mar 4-8: DES Northeast Asia weakens; looseness in fundamentals surfaces amid ample supply room

2019/03/11 07:00

--DES Northeast Asia

DES Northeast Asia prices weakened on the back of looseness in supply/demand fundamentals. There were spot cargoes from several projects including the 10.50 mil mt/year Oman project, and the 77.00 mil mt/year Qatar project in the Middle East, the 10.80 mil mt/year Sakhalin 2 project and the 28.00 mil mt/year Bintulu project in Malaysia. On the other hand, demand was generally thin as only some Korean end-users such as SK E&S and POSCO moved to buy spot cargoes. Since the 10.80 mil mt/year Sabine Pass project and the 8.40 mil mt/year Cove Point project in the US had ample supply room, market players forecast that the looseness in supply/demand fundamentals would not improve for a while.

 

--FOB Atlantic, DES Europe and South America

In South America, demand increased before the dry season. Argentina’s state-run IEASA and Brazil’s state-run Petrobras were moving to buy spot cargoes. In Mexico in Latin America, CFE opened a buy tender. While supply/demand fundamentals would unlikely tighten as there was ample supply room for Atlantic cargoes, supply/demand fundamentals were tighter than other areas.

 

--FOB Middle East, DES South Asia and the Middle East

Oman LNG was active to sell cargoes. Oman LNG sold spot cargoes to Britain’s BP and PetroChina Co Ltd in late February or after that and was marketing cargoes via short-term contracts since feed gas increased and the Oman project was expanding liquefaction facilities. Due to ample supply from the Oman project, Spain’s Union Fenosa Gas (UFG), an equity holder of the project, was moving to sell an April loading cargo. 

Tokyo : LNG Team  N Yanagi  +81-3-3552-2411
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