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Asian supply weighs on prices

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LNG Industry,

Reuters are reporting that Asian spot LNG prices have fallen sharply, with a pick up in supply forcing a Russian producer into accepting lower bids, while prices in southern Europe have held firm.

The Asian price of LNG for delivery in March fell to US$8.00 per mmBtu.

In a week of thin trade, the sale of two shipments loading in March from Russia's Sakhalin II export plant - fetching US$8 per mmBtu - was a key price marker even though the winning bid appeared to be an outlier.

Rival bids may have been as much as 70 cents below the winner, indicating the depth of bearish sentiment after production restarts from Angola and Australia last week boosted supply.

More supply is also being offered from Exxon Mobil's Papua New Guinea, Indonesia's Donggi-Senoro, Angola, Abu Dhabi as well as Australia's AP LNG, Gladstone and North West Shelf projects.

And added supply feeding into Cheniere Energy's Sabine Pass liquefaction plant may indicate a new production line, known as Train 3, is nearing completion.

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