Attractive low spot LNG rates leave importers grinning

Vol 16, PW 6 (04 Oct 12) Midstream & Downstream

Reliance, GSPC and GAIL have all capitalised on a sudden dip in spot LNG prices.

PETROWATCH learns GAIL and GSPC snapped up cargoes at attractive rates of $10.5 to $11/mmbtu ‘delivery ex-ship’, when just three months back spot prices were hovering around $13.50 to $14/mmbtu. “These are very good prices,” says an LNG sector source.

“But they won’t last. These were ‘prompt cargoes’; deal-to-delivery hardly took three weeks.

Winter is coming and rates will rise again.” GAIL landed its 135,997-cubic metre cargo from RasGas at Dahej on September 19 aboard Daewoo-built LNG tanker Simaisma.

This was only the second trip the carrier had ever made to India, with the first just nine days earlier on September 10 when it delivered a 143,713-cubic metre cargo for GSPC, also from RasGas. Greece-flagged Simaisma, owned by Athens-based Kristen Navigation and operated by Maran Gas Maritime, ferries LNG from Qatar to Europe.

But not even GSPC and GAIL could match the enviable low rate won by tough negotiator Reliance for a Nigerian spot cargo landed at Hazira on September 14. Reliance’s 139,790-cubic metre cargo was sourced at just $10/mmbtu through Shell International Trading Middle East from Nigeria LNG, and came in at Hazira aboard 141,000-cubic metre capacity River Niger.

Loaded at Bonny Island in Nigeria, the tanker flies the Bermuda flag, is owned by Bonny Gas Transport, and operated by Shell. Reliance later landed its twelfth Q-Flex cargo of the year on September 24, also at Hazira, sourced from Qatar through Shell.

Reliance’s colossal 211,968-cubic metre cargo was brought in by Marshall Islands-flagged Al-Rekayyat on its first trip to India. Operated by Shell, the Q-Flex tanker has a 216,200-cubic metre capacity.