MARKET INSIGHT: Asia Still Buying
World Gas Intelligence (Wednesday, April 12, 2006)
LNG is continuing to make its way out of the Atlantic Basin to East Asia this month, albeit at both volumes and prices substantially lower than those seen last winter, as many big Japanese buyers are holding back in hopes of obtaining cheaper fuel later. South Korea and Taiwan are each taking an Atlantic Basin cargo for April arrival, priced at $9-$10 per million Btu, market sources say, while Japanese electric utilities will probably continue their recent reversion to greater oil burning.
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1) Why would April LNG be going for $9-10/mmbtu? This price is well in excess of Henry Hub, and, although I haven't checked recently, is probably even higher than UK natty prices (which I believe are the highest in the world).
2) Is the main driver of LNG prices presently just the btu-equivalent price vs. oil?
3) If the going rate for Atlantic Basin LNG is really $9-10 this month, why would any US LNG terminal take in any cargoes for this month, given that these prices exceed local gas prices? |
