LNG prices could start to ease as new supplies come online
(Gulf Times; May 18) - Liquefied natural gas prices may be nearing a peak after reaching the highest level in more than three years, as Middle East and African supplies recover to meet unprecedented demand from Japan. LNG prices may begin to retreat by the end of the year amid rising supplies at projects from Australia to Angola, according to Petronet LNG, India's biggest buyer of the fuel.
A resumption in exports from Yemen may also ease constraints, according to Goldman Sachs Group. Cargoes for immediate delivery to Japan, the world's largest importer, cost about $18 per million Btu last week, according to World Gas Intelligence. They reached a record of about $25 in 2008. Supply disruptions and heavier-than-normal maintenance at terminals around the world led to a surge in LNG prices this year just as Japan shut the last of its 50 nuclear reactors for safety tests.
Market pressure may subside as Woodside Petroleum started shipments this month at its Pluto project in Australia and Angola opens a delayed terminal in June. The current tightness may ease somewhat at the end of the year as plants in Australia and Angola start," said AK Balyan, managing director of Petronet LNG in New Delhi. "Buyers are looking forward to that."