* Asian LNG prices rise to $6.20/mmBtu, highest since
* Offline north Asian nuclear power plants stimulating LNG
* Fresh Australian, returning U.S. supplies could cap price
By Mark Tay
SINGAPORE, Oct 7 Asian liquefied natural gas
(LNG) gas prices reached a nine-month high this week as demand
from India, Japan and South Korea underpinned sentiment.
LNG for November delivery were about $6.20 per million
British thermal units (mmBtu), 10 cents higher than last week,
as supply-demand balances for the rest of the year appear
tighter, said three traders who participate in the market. That
is the highest since the week ending Jan. 8.
Higher crude prices are also lending support to LNG values.
ICE Brent futures have gained 3.3 percent to above $52 a barrel
this week following the Organizations of the Petroleum Exporting
Countries announced plans to curb production.
LNG demand from North Asia remains firm as nuclear power
stations in Japan and South Korea that have been taken offline
are expected to stimulate demand for the super-cooled fuel.
Japan's Kyushu Electric Power Co shut the 890-megawatt No. 1
reactor at its Sendai nuclear plant on Thursday for planned
maintenance that is expected to last at least two months,
although a restart could be hampered by anti-nuclear local
South Korea has also shut multiple nuclear power plants for
maintenance and as a precaution after the country suffered its
biggest earthquake ever in September.
"We expect demand to continue to be strong in Korea and
Japan. China is also looking for more cargoes," a Malaysia-based
LNG trader said.
The best bids from Asian buyers were pegged at the low-$6
per mmBtu range, while offers were in the mid- to high-$6 per
mmBtu range, the traders said.
"It is still a buyers' market, but for November and December
cargoes, sellers can decide who they want to sell to," a
Singapore-based trader said, adding that the market may rise due
to demand from India and North Asia.
Indian gas firm GAIL closed a tender seeking a November and
a December cargo early this week. The results were not
immediately known, but traders expect the firm to have appetite
for more cargoes.
Angola LNG, which closed its sell tender for its Oct. 4-6
loading cargo on Wednesday, is likely to have awarded the tender
because of its prompt loading dates. The bids are valid until
Despite firm Asian demand, gains in spot prices could be
capped by new production from the Australia Pacific LNG (APLNG)
project that is due to start-up this quarter, and returning U.S.
supplies. Cheniere's Sabine Pass is scheduled to come back from
maintenance around Oct. 17, a source close to the matter said on
The Australian project is starting up its second production
line, an APLNG spokesman said on Thursday, with traders
expecting a first shipment to be loaded later this month.
(Reporting by Mark Tay, additional reporting by Oleg Vukmanovic
in Milan; Editing by Christian Schmollinger)