Platts: December Asia LNG Prices Rise

Platts December Asia LNG Prices Rise

Prices of December-delivered shipments of liquefied natural gas (LNG) in Asia rose 4% to $13.529 per million British thermal units (/MMBtu), according to the latest monthly Platts Japan/Korea Marker (JKM).

Platts is a leading global energy, petrochemicals and metals information provider and a premier source of benchmark price references. This follows a 0.3% increase for November-delivered shipments.

“Despite more limited demand in North Asia, spot prices were lifted by the shift from an oversupplied market to a balanced one,” said Sarah Cottle, Platts editorial director of power. “Production issues at several companies, Yemen LNG, Nigeria LNG and Indonesia’s Tangguh LNG, along with the fact that Angola LNG was still yet to come online, had a tightening effect on available supplies.”

The Platts JKM is an assessment of LNG prices for physical spot cargoes delivered to Japan and South Korea, based on the most recent trades and/or bids and offers from buyers and sellers in the open market prevailing at the close of the trading day. The monthly JKM assessments reflect prices for month-ahead delivery and are an average of the daily JKM price assessments reported by Platts.

On a year-over-year comparison, prices of cargoes for December delivery were down 22% from the same period of 2011. The December-delivery value of Platts JKM is the monthly average of daily values assessed from October 16 through November 15. This marks the fourth month of consecutive declines on a year-over-year basis, with the Platts JKM having recorded its first ever year-over-year decline in September 2012.

“Demand was much weaker than a year ago,” Cottle explained, “as Japanese power generators have now secured more gas on short- and medium-term contracts for gas-fired power plants, replacing nuclear generation that was taken offline after the Fukushima disaster.”

Meanwhile, the prices of LNG substitute fuels – thermal coal and fuel oil, which are commonly burnt by Asian utilities – dropped 3% and 4% respectively for the month.

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LNG World News Staff, November 20, 2012