--DES Northeast Asia

There is a growing likelihood of a labor strike at Australian LNG projects. At the 8.9 mil mt/year Ichthys project, operated by INPEX, labor negotiations between INPEX and the Offshore Alliance union have failed to reach an agreement despite mediation by the Fair Work Commission, and a strike is expected to begin as early May 15. Furthermore, the Offshore Alliance plans to launch strikes starting on May 20 at the 16.3 mil mt/year Northwest Shelf (NWS) project and the 4.9 mil mt/year Pluto project, both operated by Australia's Woodside, to protest wage cuts. In response, concerns are spreading in the market regarding tightening supply bound for Northeast Asia. A European analyst noted, "Depending on the duration, if strikes coincide with reduced LNG supplies from the Middle East--which has already created a tightness--the market will naturally turn bullish," and expressed the view that DES Northeast Asia LNG prices will remain in the high $10 range for the time being. Meanwhile, some players note the strike itself will be limited to sabotage for one or two hours per day.

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

Deals were heard for delivery to India. India's state-run Gujarat State Petroleum Corp (GSPC) procured one cargo for May 15-25 delivery at $17.37 through a DES-based buy tender that closed on May 13. "As it was a prompt cargo, prices were pushed up," a Japanese analyst said.

--FOB Atlantic, DES Europe and South America

Argentina's state-owned ENARSA was said to have awarded all the cargoes sought in a buy tender for June delivery closed on May 13. The tender called for a combined nine cargoes for delivery to the 6.1 mil mt/year Escobar terminal on Jun 1, 5, 9, 13, 16, 20, 23, 26, and 29. British BP won six cargoes out of nine, while European traders Vitol and Trafigura sold two cargoes and one cargo, respectively. The awarded prices centered at single premiums to the Dutch Title Transfer Facility (TTF) natural gas quotes, but two cargoes were believed to have fetched premiums of more than 10cts.