--DES Northeast Asia

In the DES Northeast Asia market last week, the front delivery contract fell from the middle of the week to stay around $13.60. Prices followed the weak Netherlands' TTF market due to increasing wind power generation,etc.

Kansai Electric Power Co (KEPCO) had bought a cargo for early December delivery on Oct 29 at $13.90-14.00. KEPCO needed to secure alternative fuels along with stoppage of operations at the 826MW No.3 unit of the Mihama nuclear power station. However, except for KEPCO, most Japanese energy utilities apparently had scant interest in spot procurement. A European trader said, "If spot demand comes out, Japanese buyers will buy spot cargoes regardless of the market. At the moment, however, they are trying to monitor a change in temperatures."

Australian Woodside on Oct 31 announced that it had completed a sale of 15.1% interests in its Scarborough gas field to JERA. Under the deal, which was based on the agreement in February, Woodside would provide JERA with 1.20 mil mt/year of LNG that would be processed either from the 4.90 mil mt/year Pluto project or the 5.00 mil mt/year Pluto 2 project in the future. A Japanese company welcomed the deal by saying "JERA's acquisition of upstream interests is beneficial in terms of supply stability." At the same time, some worry about the size of carbon emissions from the field.

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

Kuwait Petroleum Corp (KPC) procured second-half December delivery at $13.50-13.70 via a tender. "KPC bought cargo at prices more expensive than expected" (a Japanese company) was heard in the market.

--FOB Atlantic, DES Europe and South America

The recovery from wind power plants has been expected in Europe. In the UK, the output was expected to increase to 11GW on Oct 31. As a result of the rapid recovery of wind power plants, more players have seen that demand for gas-fired power plants would not grow. Moreover, the outlook by US Goldman Sachs played a part in bearish sentiment. They analyzed that if Donald Trump became the US President, trade conflicts between the US and China would intensify, possibly curbing LNG exports from the US to China and creating an LNG surplus in the world.