Global LNG-Chinese Buying Supports Asian Prices

Asian spot prices of liquefied natural gas (LNG) for December were higher at about $13.40 a million British thermal units (mmBtu) this week, boosted by demand from China and potential supply tightness from Nigeria.

The price range for spot Asian LNG in the new December delivery period was between $13.25/mmBtu and $13.60/mmBtu, several sources said, reflecting recent purchases by PetroChina, the country's dominant oil and gas producer.

Last week the price of Asian spot LNG for November delivery was assessed at just above $13/mmBtu. December is typically colder than November so prices reflect higher potential demand.

PetroChina is said to have bought between two and four cargoes for December delivery, LNG trading sources said, amid scant demand from top importers Japan and South Korea.

Spot deals to Japan, the world's largest LNG buyer and South Korea, have been threadbare in recent months after a period of rapid stockpiling ahead of the winter left inventories at terminals packed, limiting further imports.

Despite the slight pick-up in demand, LNG spot prices are still over 25 percent lower than their high of around $18 per mmBtu reached in May, when North Asian buyers were stocking up on spot supplies ahead of peak summer and winter demand periods.

The blast at a gas pipeline blast supplying Nigeria's Bonny Island LNG export plant in the Niger Delta has raised fears of supply disruption from the terminal.

France's Total this week declared force majeure on gas supplies to Nigeria LNG's liquefaction plant. Shell and Italy's Eni have also declared force majeure on gas supplies to the plant.

Nigeria is ranked as the world's seventh biggest LNG producer.

However, the world's biggest LNG producer Qatargas said this week it restarted production lines four and five after planned works, giving more supply to the market and potentially counter-balancing the impact of disruptions from Nigeria.

Demand for LNG shipping capacity has also deteriorated, with around four or five ships currently sitting at anchor in the Atlantic with no charters.

In Europe, British prompt gas prices rose on Friday morning, snapping three straight days of losses, as cooler weather forecast for next week lifted demand expectations and an LNG tanker headed to North America instead of UK.

In the United States, U.S. natural gas futures slid more than 1 percent early Friday, extending losses for a third straight day as moderating weather forecasts and record high inventories weighed.