PERTH/LONDON, Nov 22 (Reuters) - Asian spot LNG prices continued to climb toward $19 per million British thermal units (mmBtu), supported by strong winter demand from China, Japan and South Korea, while Argentina's second tender award tightened global supplies.
China is facing a gas shortage which has sent it trawling for LNG cargoes just as top importers Japan and South Korea are stockpiling supplies for winter.
Asian LNG prices were at around $18.60 per mmBtu on Friday, up from $18.30/mmBtu last week.
China's LNG imports have already jumped 20 percent in the year to October and will probably continue to rise as the country commissions a series of new LNG receiving terminals in the coming months.
With extra Chinese demand and new import capacity, prices of the super-cooled fuel may reach $20 per mmBtu before the end of the year, trade sources said.
Last week Qatargas delivered the commissioning cargo of LNG to China's new Tangshan LNG terminal, while its first floating LNG terminal is expected to start operation next month.
In South America, demand has weakened with the arrival of the southern hemisphere summer.
"Spot demand out of Argentina and Chile seems to have pulled back a bit as they enter into their summer season. We could see some additional spot demand out of Brazil if hydro levels are not replenished," Waterborne LNG analysts said in a note.
Argentina awarded its second tender in as many months, for 15 LNG cargoes next year. Russia's Gazprom will supply 10 cargoes into the country's Bahia Blanca terminal.
Spain's Gas Natural Fenosa will deliver two cargoes into the river terminal at Escobar, with Brazil's Petrobras supplying the other three also into Escobar, a trade source said.
Argentina will pay for a quarter of the cargoes' value prior to the loading date and transfer the rest before the ship enters its territorial waters, a trader said.
The role of pre-payment for LNG cargoes - which can cost up to $45 million - has helped encourage participation in Argentine tenders despite the country's wider credit problems.
On the supply side, Indonesia's Donggi-Senoro LNG has pushed back first production to March 2015 from an earlier target of 2014.
This delay means only two new projects - Exxon Mobil's PNG LNG and BG Group's Queensland Curtis Island LNG - are scheduled to come online in the Asia Pacific region in 2014, signalling a further tightening of global LNG supplies.
Asian spot LNG prices are expected to trade on average $1/mmBtu higher this year compared with 2012, BG Group's head of LNG trading Andrew Walker said at a conference this week.
In India, GAIL's recent offer of regasified LNG drew strong interest from industrial customers on its pipeline network, the state-run energy firm's chairman B.C. Tripathi said this week.
Around 70 companies bid for GAIL's supplies, Tripathi told Reuters, with the price formula based on a combination of benchmark U.S. gas prices and crude oil, equating to around $13.50/mmBtu when crude oil trades at $100 a barrel.
Once regasification charges, taxes, duties and pipeline transportation costs are taken into account, the price of the gas jumps as high as $19/mmBtu, Tripathi said.
The delivered cost of regasified LNG in India exceeds the the current global spot price for the fuel.