TOKYO: The Platts JKM for July delivery the new front month held its ground at $7.75/MMBtu over the Asian trading week, as bids and offers remained static following reported deals. July had begun trading May 18 at $7.75/MMBtu after June had ended the Asian trading month at $7.425/MMBtu May 15. Offers for July had reached the high-$7s/MMBtu or even low $8s/MMBtu, but bids were scant as, for most buyers, negotiations for July were only just beginning to get underway.
Demand remained thin, with only a few privately held buyers in China and South Korea considered to have any firm requirement in northeast Asia. However, at least one Japanese utility was already heard to have transacted for July delivery, taking a Bontang origination at around the mid-$7s/MMBtu on an FOB basis, market sources said.
The buyer was also said to have a concluded a deal for a Brunei-origin cargo around $7.90/MMBtu DES for late June delivery.One or two sources said that the buyer in question could have been affected by the recent production issues at Australia’s North West Shelf LNG facility, causing it to enter the spot market, but this was unconfirmed.
Since its restart on May 12, the NWS facility was understood to have reached 50% of operational capacity and had loaded more than three cargoes, ending the production shut in.The impact on the market appeared to have been limited, however, with so much production available from other projects. Russia’s Sakhalin, Malaysia’s Petronas, Australia’s Darwin were all heard to have at least one cargo each available for July delivery within the Asia- Pacific Basin.
Nigeria LNG could also launch another tender for an FOB cargo in July, according to numerous sources, who said that there was still plenty of availability within the Atlantic basin, despite numerous ongoing buy tenders which had attracted plenty of interest.
New buyer Jordan’s NEPCO launched a tender Wednesday seeking a total of 40 cargoes between 2015-2017, with four cargoes delivered between June to September this year, and a further 18 in 2016 and 2017 respectively.
The Exxon-led Papua New Guinea facility was said to have pre-sold July cargoes to Japanese and Taiwanese buyers, although the details of the transactions were unclear.Taiwanese incumbent CPC has returned to the spot market in recent weeks, receiving at least three non-contractual cargoes from Australia, Nigeria, Russia and Kenai, while a further three were due to be delivered by the end of May, Platts ship tracking data cFlow showed.
Elsewhere, the Solaris had entered the South Korean Gwangyang terminal unladen, according to cFlow, indicating that the facility may be reloading volumes.The vessel heard to be under charter to Shell — was heading west, suggesting that the delivery point could be either India or Middle East.
India remained the premium market, with the Platts DES West India marker ending the week at $7.85/MMBtu, as buyers in the country had increased their bids beyond $7.50/MMBtu.
At least two continued to show demand for July, although several questioned how firm this requirement actually was because recent tenders had largely gone unawarded owing to offers that were not in line with buyers expectations.With UK onshore NBP gas prices starting to fall back on warmer weather and ample supply, the west to east arbitrage was beginning to re-open.
The spread between the NBP and JKM had widened to $1.26/MMBtu over the week, levels not seen since late March.In related news, Japan’s Nuclear Regulatory Authority has granted approval for the restart to Shikoku Electric’s 890-MW Ikata nuclear reactor, LNG importer Kyushu Electric is aiming to restart one of its Sendai reactors by the first half of July, with plans to restart the second facility in August.
