22 May 2013 07:27 [Source: ICIS news]
SINGAPORE (ICIS)--China’s liquefied natural gas (LNG) prices have been increasing in the spot market since the beginning of May in response to declining domestic production along with unit shutdowns, market sources said.
As of 22 May, 12 LNG plants, with a combined liquefaction capacity of 6.23 million cubic metres (mcm)/day, remained shut or partially shut as a result of unit maintenance, routine turnarounds and gas supply shortage, according to data compiled by ICIS C1 Energy.
The daily domestic LNG supply aggregated 12.34mcm on 21 May, a drop of 3.13mcm from a month ago, ICIS C1 data showed.
Therefore, most LNG producers and traders raised their prices in view of the falling supply.
Major producers, such as China Natural Gas Corp, Shaanxi Yanchang Petroleum (Group) and Ningxia Hanas Natural Gas, increased their EXW (ex-works) offers by yuan (CNY) 50-100/tonne ($8.10-16.20/tonne), and are expected to continue raising the prices, the market sources said.
The average DEL (delivered) price of spot LNG by trucks also increased by CNY17/tonne week on week to CNY4,975/tonne on 21 May in east China, ICIS C1 data showed.
Moreover, freight rates for long-distance LNG truck delivery declined as demand for truck delivery decreased in line with falling domestic supplies, the sources said.
LNG tank trucks were even left idle in some regions, added the sources.
LNG EXW prices are expected to rise in June as domestic supplies are likely to drop further after Xi'an City Xilan Natural Gas Group, Shaanxi Yanchang Petroleum (Group) and Ordos Xingxing Energy shut their liquefaction units, with the capacities totalling 2.5mcm/day, for turnarounds in June, the sources said.
($1 = CNY6.14)
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