October 14, 2016 / 2:17 PM / in 9 months

GLOBAL LNG-December contract widens premium to November as demand firm

2 Min Read

Oct 14 (Reuters) - Asian spot liquefied natural gas (LNG) prices for November delivery steadied this week while December widened its premium in a slow week of deal making as traders focused on tenders.

The price of LNG for November delivery was $6.20 per million British thermal units (mmBtu), in line with last week, while December traded around $6.55 per mmBtu, according to trade sources.

December prices may have been pushed higher from earlier this week by strong bids for four December-loading cargoes offered by Russia's Sakhalin II export facility, one source said.

Demand from price-sensitive Indian buyers remained strong despite rising prices.

"When the Indians are willing to pay market rates (above $6/mmBtu), it tells you something about the market," a Singapore-based LNG trader said.

Earlier in the week, Korea Gas Corp tendered to buy four cargoes for delivery across November-February, as it seeks to replenish reserves.

South Korean demand may firm as a new reactor went offline this week, adding to a fleet of reactors already taken out of service due to either last month's earthquake or planned maintenance.

Indonesia's Pertamina tendered to sell one or two cargoes per month in 2017 from its Bontang liquefaction plant and is to be priced against a basket of Japanese crude oil grades, known as the JCC.

And Angola's recently refurbished export facility continued to pump out cargoes as it launched its third tender for a November-loading cargo.

Gains in spot prices may be capped by new production from the Australia Pacific LNG (APLNG) project that is underway, and returning U.S. supplies. Cheniere's Sabine Pass is scheduled to come back from maintenance next week. (Reporting by Oleg Vukmanovic in Milan and Mark Tay in Singapore; Editing by Ruth Pitchford)

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