--DES Northeast Asia

In the DES Northeast Asia market last week, prices moved rangebound from a week earlier. Front month delivery prices moved around $13.50-13.80. The arrival of typhoon forced Japanese end-users to stay sidelines in the market. Amid this, South Korean end-user, POSCO inked a long-term contract with Mexico Pacific.

Typhoon No.10 affected the wide areas in Western Japan. Kyushu Electric Power Co lowered output at the 700MW No.1 unit and the 1,000MW No.2 unit at the Matsuura coal-fired thermal power plant from Aug 29 by curtailing input volume of coal. Shikoku Electric Power Co, which postponed receiving LNG tankers, has also moved lower operating rates of the No.1, No.2 and No.4 units fueled by LNG at the 1,385 MW Sakaide power plant since Aug 27 due to fuel restrictions. Kansai Electric Power Co would reduce output from the No.1-6 LNG-fired units at the 2,919 MW Himeji No.2 power plant from Aug 30 in the wake of fuel restrictions.

POSCO, a major steel manufacturer in South Korea, inked a long-term contract with Mexico Pacific Limited to buy 0.7 mil mt/year of LNG loading from the 14.10 mil mt/year Saguaro Energia project for 20 years on an FOB basis. Prices in the contract were allegedly based on Waha Hub, located in west parts of Texas in the U.S. "The buying cargo loading from the Pacific coast offers a risk hedge to end-users in Northeast Asia like POSCO because the deal allows them to reduce dependence on Australia as well as Southeast Asia and shipment without using the Panama Canal. In addition, South Koreans can enjoy the merits of the Free Trade Agreement (FTA) with the U.S, which exempts them from applying for approvals for using U.S.-origin feedgas" (a Japanese company).

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

Bahrain would import LNG for the first time in the past five years since 2019. Bahrain Petroleum Co (Bapco) has issued a buy tender that would be closed on Aug 29. Through the tender, Bapco planned to buy one cargo delivered to a floating storage regasification unit (FSRU) in Bahrain on Oct 20-Nov 10.

--FOB Atlantic, DES Europe and South America

Hess, a natural resource developer in the U.S, has been calling for participation in interests for the block 59 mining site off the coast of Suriname, and this was because Equinor, a major natural resource company in Norway, and US ExxonMobil handed the interests of the site to Hess early in August. "Equinor and ExxonMobil might have regarded block 59 as unpromising and prioritized to invest existing prospective gas fields with the returns," said a Japanese company.