LONDON: Pakistan issued a tender on Friday to buy five cargoes of liquefied natural gas (LNG) for delivery in January 2020, Pakistan LNG Limited (PLL) documents showed.
The delivery windows are Jan 6-7, Jan 11-12, Jan 16-17, Jan 23-24 and Jan 28-29. The deadline to submit offers is on Nov 26.
Asian spot prices for LNG slipped this week, weighed by global oversupply and rising floating storage, which offset some buying interest and plant maintenance, which reduced production.
The average LNG price for December delivery into northeast Asia was estimated at $6.30 per million British thermal units (mmBtu), $0.50/mmBtu down from last week.
Buyers from Japan, South Korea and Pakistan came to the market looking for winter cargoes, but market sources said it was not enough to reduce a significant global oversupply, adding that the market was overpriced in recent weeks.
The number of vessels floating with cargoes on board soared to 28 from 19 in the past week, according to data provider Kpler.
The majority of those cargoes were loaded close to a month ago or more, with some loaded back in August, meaning that sellers may be under pressure to unload them as soon as possible.
“Generally you cannot store LNG on a vessel for more than two months due to its ageing and boil-off,” one LNG trader said, referring to natural evaporation.
“Those who have been floating LNG for 1.5 months are likely offering cargoes with a significant discount, which puts pressure on the market.” At least five tankers from the floating storage were loaded close to 1.5 months ago or more.
The drop in Asian prices has resulted in a tighter spread between Europe and Asia, with the arbitrage for cargo from the United States to Asia closing this week.
The trade from the Atlantic basin to the Pacific has also been impacted by high shipping rates.
Rates were estimated at around $130,000-140,000 per day this week. Two shipping sources said that there was also a deal at $150,000/day in the Atlantic basin this week.
