• 4 minutes Ten Years of Plunging Solar Prices
  • 7 minutes Hydrogen Capable Natural Gas Turbines
  • 10 minutes World looks on in horror as Trump flails over pandemic despite claims US leads way
  • 13 minutes Large gas belt discovered in China
  • 12 hours Norway horrified as new rates make EV charging prices higher than petrol
  • 5 hours 60 mph electric mopeds
  • 3 hours US-China tech competition accelerates: on Friday 05/15 new sanctions on Huawei, on Monday 05/18 Samsung chief visits China
  • 2 hours COVID 19 May Be Less Deadly Than Flu Study Finds
  • 4 hours China to Impose Dictatorship on Hong Kong
  • 6 mins Payback Time: Republican Senators turn the tables on Democrats. The difference is the Republican investigations are legit.
  • 3 hours Iran's first oil tanker has arrived near Venezuela
  • 9 hours Why 2030-Isn.t-The-Magic-Year-For-Electric-Vehicles
  • 11 hours Monetary and Fiscal Policies in Times of Large Debt:
  • 13 hours DEFIANCE – There are More of Us Than Them
  • 11 hours Ventura County to Replace Natural Gas Generation with Battery Storage
  • 13 hours Trumpe will win next election, hands down.
  • 17 hours Let’s Try This....
The Oil Bulls Are Back

The Oil Bulls Are Back

Some positive news about a…

Driving Season Won’t Save Gas Demand

Driving Season Won’t Save Gas Demand

Memorial day weekend usually marks…

Something Very Unusual Just Happened In Asia’s Roaring LNG Market

Japan, the world’s single largest importer of liquefied natural gas (LNG), has imported its first LNG cargo on record from the world’s second-biggest importer and largest growth market, China, as the Asian LNG market has seen some unusual developments this year.

An LNG cargo of 70,560 tons was shipped in July from China’s LNG terminal Hainan, operated by state-held CNOOC, to a terminal near Nagoya in Japan, Reuters reported on Thursday, quoting a source with knowledge of the matter.

With low summer Chinese gas demand, Chinese buyers of LNG have started to re-export some cargoes, while Japanese buyers are looking to buy spot LNG cargos at prices at multi-year lows, in order to reduce their gas import costs, because Japanese utilities typically have term contracts for LNG imports at prices indexed to oil prices.

According to Reuters, the LNG cargo from China was shipped at a price of US$5.68 per million British thermal units (MMBtu). This compares with an average import cost for Japanese utilities of US$9.50/MMBtu for July.

Utilities in Japan are seeking price reviews in their short term LNG supply contracts as the Japanese energy market liberalization boosts competition and as Asian spot prices slump to their lowest in years.  

Japanese LNG buyers are increasingly aggressive in the price reviews of their long-term supply contracts indexed to oil prices. Japan has also liberalized its energy markets, meaning that utilities are competing against each other and for lower-cost power sources, as the old ‘pass the higher costs on to consumers’ strategy doesn’t work anymore in this more competitive market.

The other key reason for intensified price reviews of LNG contracts is that this year’s depressed spot LNG prices in Asia are now half the price compared to the average price of the term contracts that Japanese utilities have signed, according to Japanese trade data and Reuters estimates.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News