Tuesday, December 16, 2014

Lng market report December 2014

Demand for LNG on an in-tank basis in Spain continued to be weak, traders said ,referring to the recent market.One AOC-based trader heard a bid of €28.00/MWh for December lifting ($10.20/MWh) on an in-tank basis on 7 November. Once the third-party costs associated with reloading had been added, this would put a reload at around the $11.00-11.20/MMBtu range, another trader commented on 11 November.

The near total lack of any netback was not that relevant, the trader believed, as it feels that the Spanish FOB (free on board) prices had now more or less decoupled from East Asian prices.

Traders agreed that there was apparently little interest for the time being in Spanish FOB material. Executing reloads out of Spain remains difficult at current global spot levels, and it was heard that there was still interest in products that allow in-tank volume delivery to be deferred.

One trader stated that prior to the expiry of the November’14 contract at the end of October, a buyer had been prepared to pay a €1.50/MWh ($0.55/MMBtu) premium for the right to swap in-tank LNG for November delivery for December instead. There is also evidence that Spanish counterparties are now looking to regasify more LNG from tank, rather than reloading it, with regasification rates from Barcelona hitting almost 89GWh on 10 November. This is compared with an average of 37GWh/day over the month to date.

Similary, at Huelva, Sagunto and Reganosa, in the port of Ferrol, all four terminals were at close to 80% fullness on 10 November, according to nominations data from Spanish gas transmission system operator (TSO) Enagas.

“[Full LNG stock levels] seems to be having a positive impact on regasification, which is very high in a relatively high demand context (system demand of above 1 TWh/ day) with no extremely cold weather,” one terminal source commented.

“The Spanish gas system is full of LNG, I heard that some shippers are asking to delay unloading as terminal tanks are full,” it added. Sellers would cut pipeline imports to balance this increase, another trader said.

The 151,945 million cubic metre (mcm) British Ruby will şift a 138,000cbm reload at the Saggas LNG terminal on 14 November, data from the port of Sagunto and Enagas showed on Tuesday, in a late change to an earlier published schedule, as until Monday vessel tracking data showed Cartagena as the ship’s destination.

Until 10 November, a separate BP vessel, the 138,283cbm British Innovator, had been scheduled to dock at Sagunto on Tuesday 11 November. However, the vessel actually discharged a total of 791GWh (134,960cbm of LNG) into Gate instead, according to vessel data and information from the Gate LNG terminal in Rotterdam. The vessel is now at anchor outside of the Spanish port, although it is not yet clear where the vessel will head to next.

The 150,981cbm Explorer is meanwhile also due into Sagunto on 12 November, port data shows. The Excelerate-controlled vessel is en route from Aliaga in Turkey, according to vessel data.

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