Asia LNG prices at over 6-month high on Gorgon concerns, cargo buying

Asia LNG prices at over 6-month high on Gorgon concerns, cargo buyingLONDON: Asian spot liquefied natural gas (LNG) prices rose to more than a six-month high this week on concerns over production from Australia's Gorgon plant and demand from some buyers in the region.

The average LNG price for September delivery into northeast Asia was estimated between £3.60 and £3.80 per million British thermal units (mmBtu), £0.60 per mmBtu above last week's level. The price for October delivery was seen between £3.80 and £4.00 per mmBtu. This is for the first time since end-January when prices increased to levels close to £4.00 per mmBtu, Reuters data showed.

Gorgon Train 2 has been shut for maintenance since May, with its restart date delayed to September from July.

Two other trains were also ordered to be inspected after safety concerns were raised.

Offtakers from the plant have likely bought several cargoes to replace Gorgon volumes in the past two weeks, traders said. Some buyers in Japan, China and India have also been buying cargoes, but said overall demand was still subdued, they added. "There is a slight uptick in demand, but not a huge amount and supply seems to be there," one of them said.

China's Shenzhen Energy has bought a September delivery cargo at £3.40-£3.50 per mmBtu, two industry sources said. Indian Oil Corp has purchased a late September cargo at around £3.40 per mmBtu, two other trade sources said. India's Reliance Industries has bought an October delivery cargo at around a £0.15 discount to S&P Global Platts Japan Korea Marker (JKM) price and a November cargo at a £0.45 discount to JKM, the two trade sources said.

Bangladesh state-run Rupantarita Prakritik Gas Company plans to issue a tender for country's first spot cargo to be delivered next month.

European gas prices have declined after picking up last week but were still hovering at an over 4-month high, with traders expecting more cargoes to arrive in Europe in September and October than previously expected following the price rise.

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