Third cargo from Egypt expected on 17th September

Vol 10, PW 10 (07 Sep 06) Midstream & Downstream
     

Gas customers hoping the next cargo of spot LNG from Egypt would have landed at Dahej on 3rd September as reported in our last issue will be disappointed.

Delivery of the third spot cargo for Petronet-LNG from Idku has been put back to mid September. It will now come on 17th September, we hear.

We receive one cargo every four days from RasGas and finding a slot was a problem. This cargo, like the first, will be from British Gas, which owns 35.5% of Train-I at Idku.

Petronas holds 35.5%, Gaz de France owns 5% and Egyptian companies own the rest. Also dashed are hopes that the Free on Board (FOB) price of this third cargo, when agreed with British Gas, will be near the $7 per mmbtu ex-ship range as the earlier two cargoes, one each from BG and GdF.

Were in the middle of winter purchases, adds a source. At this time of year Japan, Korea and Taiwan start looking around for their winter cargoes.

Prices inevitably go higher. How much will the third cargo cost Petronet-LNG is not in the business of paying more than $8.50-$9.00 at todays rates, we hear.

We hear the ex-ship price of the 80m cubic metres of LNG that will be discharged from the 139,00 cubic metre carrier from Idku is less than $9 per mmbtu. Petronet-LNG is confident it can secure cargoes cheaper than anything GAIL or Shell can obtain, driven by the distress sale nature of spot sales - not because GdF holds 10% in Petronet-LNG and is also a stakeholder at Idku.

GdF is as mercenary as the others when it comes to price, we hear. Spot sales are not created by design.

They are distress sales. Somebody, somewhere is defaulting on his purchases.

It is unclear where this third cargo was destined for, but Spain, it seems, is perceived to be most in distress at the moment. Spain is defaulting on its commitments to Algeria, Nigeria and Egypt, we hear.