Asia’s spot LNG prices rise on Sakhalin outage

The prices of spot liquefied natural gas in Asia are climbing after hitting a 6-year low in late January, due to production problems at Russia’s LNG export facility located on Sakhalin Island.

The Platts March JKM rose 30 cents/MMBtu to $5.35/MMBtu Tuesday, and bids emerged close to $6/MMBtu by early Wednesday, with at least one deal concluded for late February or early March delivery at around $6/MMBtu DES, Platts reported on Wednesday.

The Sakhalin-2 project reported production problems last week at its 9.6 mtpa LNG export facility located in Russia’s Far East region. The LNG project declared force majeure on 28 January due to a power outage at the Sakhalin-2 liquefaction plant.

By January 29, LNG production at the facility had been reduced by 50 percent, Platts said in the report.

The events at Sakhalin have also resulted in extra demand from at least one portfolio seller, and prompted some of the facility’s long-term customers — Kogas of south Korea and several Japanese gas and power utilities — to review their LNG inventories, already affected by a recent cold snap in the region, the report added.

LNG production rose in 2015

Gazprom recently said that the liquefied natural gas project exceeded its design production capacity by 1.2 million tons in 2015.

The LNG project consists of two trains with Shell and Gazprom working to add the third train.

Sakhalin Energy is the Sakhalin-2 project operator with the ownership distributed among Gazprom (50 percent plus one share), Shell (27.5 percent minus one share), Mitsui (12.5 percent) and Mitsubishi (10 per cent).


LNG World News Staff




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