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LNG prices slip but remain at double digits on firm demand

·2 min read
FILE PHOTO: A liquified natural gas (LNG) tanker leaves the dock after discharge at PetroChina's receiving terminal in Dalian

By Jessica Jaganathan

SINGAPORE (Reuters) - Spot liquefied natural gas (LNG) prices in Asia slipped this week, but remained at double digits as demand was firm globally from the power generation sector, according to trade sources.

The average LNG price for August delivery into Northeast Asia was estimated at about $11.70 per metric million British thermal units (mmBtu), down 10 cents from the previous week, they said.

The price for cargoes delivered in July was estimated to be about $11.90 per mmBtu, down 20 cents from the previous week, they added.

Still, LNG prices have more than doubled since late February.

That has been driven by "strong Asian LNG demand, especially in China, low European summer gas stocks, record EU carbon prices and unplanned LNG plant outages," said Ed Cox, global LNG editor at ICIS, in a note earlier this week.

Demand from China continued to be firm with Guangzhou Gas seeking a cargo for delivery in July and Shenzhen Energy buying a cargo for delivery in July at about $11.70 to $11.80 per mmBtu, traders said.

Still, with the electricity crunch in China's southern regions that started in mid-May easing, the situation is expected to improve during the monsoon, a National Development and Reform Commission (NDRC) spokesperson said on Thursday.

India's gas consumption is also recovering after states started to ease restrictions in the wake of a drop in coronavirus infections.

The country's top gas importer Petronet LNG sought a cargo for June delivery while Indian Oil Corp is seeking a cargo for August delivery, the traders said.

Kuwait Petroleum Corp bought a commissioning cargo for its new Al Zour terminal from Qatar Petroleum at about $12.10 to $12.30 per mmBtu, they added.

In sell tenders, Egypt's natural gas company (EGAS) sold a cargo for late July loading at about $10.20 per mmBtu while Oman LNG offered a cargo for delivery into northeast Asia in August, traders said.

Meanwhile, Chevron Corp plans to restart Train 3 at the Gorgon LNG plant in Australia in the "coming weeks", after it was shut for maintenance and weld inspections.

(Reporting by Jessica Jaganathan; Editing by Ana Nicolaci da Costa)