Spot Prices Steady Above 3-Year Highs As Cold Spurs Buying
LONDON, Jan 2 (Reuters) - Asian spot LNG prices held above three-year highs on Tuesday as cold temperatures across Japan and continued strong demand from Chinese importers buoyed the market.
Japanese utilities have been actively buying cargoes in recent weeks as cold weather sweeping the country has fuelled demand for replenishing depleted stocks.
Although long-range forecasts for Japan signal a return to normal for the coming few weeks, temperatures are seen to plunge well below normal in the South Korean capital Seoul which is expected to add to pre-existing demand, traders and analysts said.
China, which surpassed South Korea as the world's second-biggest LNG importer, continues to attract spot cargoes following rapid consumption growth in 2017 when imports grew 48.4 percent.
China's rapid shift to gas from coal this year has squeezed domestic grids and led to supply shortages as well as price spikes, prompting the central government to roll back some restrictions on coal use in a bid to ease the gas supply crunch.
On the supply side, Australia's Wheatstone export facility returned from more than a month-long shutdown with the Asia Excellence tanker currently loading at the port, and two more vessels due at the port in early January.
Exports from the Gorgon plant in western Australia picked up this week after a production unit at the facility likely resumed output on Dec. 25.
Furthermore, Indonesia's Bontang LNG put 11 cargoes up for sale between February and December via a tender which closes on Jan. 8.
New supplies are also emerging from Russia's new Yamal LNG project in the Arctic.
The first shipment aboard the Christoph de Margerie arrived at Britain's Isle of Grain terminal and, in line with long-standing expectations, is currently being re-exported using the Gaselys tanker for onward delivery.
The ice-class tankers carrying volumes from Yamal cannot stray too far from the plant due to rigid shipping schedules and therefore must deposit cargoes at north-west European terminals in winter, where standard vessels can pick them up for delivery to Asia or other premium markets.
The second shipment from Yamal aboard the Boris Vilkitsky dropped off its cargo at the Gate terminal in the Netherlands and has since been re-exported.
PetroChina controlled that cargo.
Commodity traders Vitol, Trafigura and B.B. Energy submitted the most competitive prices in a tender to supply Pakistan with four LNG cargoes in March.
(Editing by David Evans)
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