30 July 2013 13:34 [Source: ICIS news]
SINGAPORE (ICIS)--Supply of imported liquefied natural gas (LNG) is expected to tighten in east China in August because of rising demand from power generators and possibly fewer arrivals, sources said on Tuesday.
LNG terminals in east China are rationing spot sales at present in order to guarantee supplies to term buyers, particularly power plants, a source at an LNG terminal said.
Gas demand for power generation has turned robust as increasing temperatures drive up electricity consumption, the source added.
The spot sales of imported LNG were about 90 trucks (20-21 tonnes per truck) on 29 July in east China, down by five trucks from a week ago, market sources said.
However, the reduction is expected to pose limited impact on spot market as arbitrage cargoes from northern China will flow into this region, sources added.
Meanwhile, the schedule of cargo arrivals into the Ningbo terminal, which is owned and operated by China National Offshore Oil Corp (CNOOC), has not been finalised yet, a trader said.
CNOOC may divert some August cargoes due for Shanghai and Ningbo to its Dapeng terminal in Guangdong province instead, to make up for the loss of supply at the Dapeng terminal, the trader added.
Australia’s Woodside has cancelled two August cargoes to the Dapeng terminal because of shutdown of a liquefaction train. Both CNOOC and PetroChina have therefore raised their August prices of LNG in east China.
CNOOC hiked August offer from Ningbo terminal to yuan (CNY) 5,650/tonne, up by CNY270/tonne from July. PetroChina’s August offers from Jiangsu terminal increased CNY100/tonne to CNY5,400/tonne.
The spot LNG trading closed CNY200-260/tonne higher at CNY5,100-5,160/tonne on 29 July on the Shanghai Petroleum Exchange (SPEX).
There are three operational LNG terminals in east China, two of which are operated by CNOOC.
($1 = CNY6.14)
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