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Released October 30, 2014 | PERTH, AUSTRALIA
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Researched by Industrial Info Resources Australia (Perth, Australia)--The fall in Asian liquefied natural gas (LNG) spot prices in the first half of October has fuelled concerns from Australian LNG exporters about the impact of weaker spot prices on Australia's seven major projects, which will become operational from late 2014 to 2017.
The East Asia Index (EAX) revealed that Asia has struggled to absorb abundant LNG supplies amid weak demand conditions. The November 2014 EAX was assessed at $13.95/million British thermal units (MMBtu) MMBtu on 15 October, a decline of $0.775/MMBtu from the September 29 high of $14.725/MMBtu.
The decline in spot prices was caused by the absence of some of Japan's largest utility buyers, who already have attained sufficient LNG supplies. Many in Japan also are predicting mild October weather, which would weaken domestic gas demand.
The emergence of an LNG oversupply became clear in September. According to a press release by petrochemical, energy and fertilizer market information service ICIS (London, England) , Abu Dhabi Gas Liquefaction Company Limited (ADGAS) (Abu Dhabi), North West Shelf Gas Pty Limited (Perth, Australia), and Exxon Mobil's (NYSE:XOM) (Irving, Texas) Papua New Guinea LNG production facility opened tenders to sell at least four LNG cargoes for November delivery.
View Plant Profile - 3028388 1065390 1080995
According to ICIS, the Bontang LNG plant in Indonesia closed a tender for the delivery of six cargoes, while BP plc's (NYSE:BP) (London, England) Tangguh project on the Indonesian island of West Papua marketed four early winter spot cargoes.
View Plant Profile - 3015030 1063548
The volatility of the Asian LNG spot price is a major concern for Australian suppliers and the seven major LNG projects that are being closely tracked by Industrial Info. The reluctance of Asian buyers to commit to long-term supply contracts means that Australian suppliers will become more reliant on spot prices when selling LNG in the future.
Australian exporters are becoming increasingly concerned that LNG spot prices will continue to decline if the Asian market becomes swamped by LNG supplies from the U.S. and Middle East, which will ramp up production toward the end of the decade. There is also a possibility that LNG demand from Japan will weaken if the country restarts more of the nuclear reactors that were closed after the 2011 Fukushima disaster.
The risk of declining spot prices would hit Australian suppliers, who have invested more than $200 billion in LNG projects.
For more information, visit Industrial Info's Oil & Gas Production Database.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
The East Asia Index (EAX) revealed that Asia has struggled to absorb abundant LNG supplies amid weak demand conditions. The November 2014 EAX was assessed at $13.95/million British thermal units (MMBtu) MMBtu on 15 October, a decline of $0.775/MMBtu from the September 29 high of $14.725/MMBtu.
The decline in spot prices was caused by the absence of some of Japan's largest utility buyers, who already have attained sufficient LNG supplies. Many in Japan also are predicting mild October weather, which would weaken domestic gas demand.
The emergence of an LNG oversupply became clear in September. According to a press release by petrochemical, energy and fertilizer market information service ICIS (London, England) , Abu Dhabi Gas Liquefaction Company Limited (ADGAS) (Abu Dhabi), North West Shelf Gas Pty Limited (Perth, Australia), and Exxon Mobil's (NYSE:XOM) (Irving, Texas) Papua New Guinea LNG production facility opened tenders to sell at least four LNG cargoes for November delivery.
View Plant Profile - 3028388 1065390 1080995
According to ICIS, the Bontang LNG plant in Indonesia closed a tender for the delivery of six cargoes, while BP plc's (NYSE:BP) (London, England) Tangguh project on the Indonesian island of West Papua marketed four early winter spot cargoes.
View Plant Profile - 3015030 1063548
The volatility of the Asian LNG spot price is a major concern for Australian suppliers and the seven major LNG projects that are being closely tracked by Industrial Info. The reluctance of Asian buyers to commit to long-term supply contracts means that Australian suppliers will become more reliant on spot prices when selling LNG in the future.
Australian exporters are becoming increasingly concerned that LNG spot prices will continue to decline if the Asian market becomes swamped by LNG supplies from the U.S. and Middle East, which will ramp up production toward the end of the decade. There is also a possibility that LNG demand from Japan will weaken if the country restarts more of the nuclear reactors that were closed after the 2011 Fukushima disaster.
The risk of declining spot prices would hit Australian suppliers, who have invested more than $200 billion in LNG projects.
For more information, visit Industrial Info's Oil & Gas Production Database.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
