ICIS Heren Launches Pricing for South American and US LNGBy Icis Heren, PRNE
Tuesday, November 16, 2010
LONDON, November 17, 2010 - In the last year, South America has emerged as both a producer and
importer of the Liquefied Natural Gas (LNG). This has had implications for
global gas prices and supplies into both Europe and Asia. Argentina and
Brazil have become among the premium spot LNG markets in the world,
challenging the long-time domination of the East Asian markets. For the first
time in the history of spot LNG trade, Japanese and South Korean traders are
concerned about the price levels Argentina and Brazil can bid for the world's
available LNG cargoes. And for the first time, LNG has been re-loaded from
NorthWest Europe and the US for trade into South American markets.
As South American winter demand hits during the northern hemisphere
summer, the appetite of these markets may have a long-term effect on the
typical seasonal gas pricing patterns in Europe. The gap between summer and
winter prices in Europe may become a thing of the past.
Some of the cargoes bound for Argentina and Brazil were sourced as
re-loads in the United States. With increased domestic shale gas production
and the attendant price slump on Henry Hub, the US Gulf region is rapidly
becoming a filling station, where traders with demand elsewhere can purchase
a cargo on an FOB basis either in Sabine Pass or Freeport. The number of
applications for re-export licenses is growing fast as traders with capacity
in the United States are looking to take part in the dynamic re-load trade,
which was previously almost exclusive to importers at Belgium's Zeebrugge
terminal. Some would argue that the United States could become a regional
trading hub, creating extra levels of liquidity and flexibility in the
For these reasons, ICIS Heren is launching the first Chile spot LNG DES
prices to add to its portfolio of South American coverage, which already
includes Argentina and Brazil. It is also now able to provide a South
American Pool Price, giving a pan-regional spot price for the first time.
Responding to demand of traders worldwide, ICIS Heren also introduces a
US Gulf Re-load price, assessing the cost of FOB cargoes sourced in both
Freeport and Sabine Pass.
In Europe, ICIS Heren launches Portugal spot LNG DES prices to expand its
already wide coverage of the Mediterranean basin. Further reflecting the
requests of LNG traders, ICIS Heren establishes an Iberia Pool Price to
reflect the geographic proximity and similarity in demand patterns of
Portugal and Spain, while retaining Greece, Turkey and Italy in its ICIS
Heren Mediterranean Pool Price.
All of these prices are available to subscribers of ICIS Heren's LNG
Markets Daily publication. Historical pricing and data feeds for these
markets is also available.
Notes to Editors
Recent trade in South America
In a recently held tender, Argentina's Enarsa secured 9 cargoes
understood to be priced between $9.60/MMBtu and $11.00/MMBtu for delivery
between November and March, with another cargo tender closing on Monday 15th
Brazil's import season was expected to be completed in October, but
Petrobras continues to procure into December, balancing the country's
hydro-power generation capacity and availability of LNG on the global market.
Petrobras managed to secure FOB cargoes this year from Qatar's RasGas, a
re-load cargo from Zeebrugge and exploited the proximity of Nigeria's
production when NLNG held tenders.
These import markets, coupled with massive production coming on-line in
Peru, should make things interesting for European buyers this coming winter
and have clearly increased liquidity on the global LNG market. Throughout
this summer, Petrobras was paying a high premium to the UK NBP market, making
it among the most attractive spot buyers.
Despite Argentina's healthy demand, the majors shy away from the country,
citing concerns over the technological compatibility of their vessels with
Excelerate's ship-to-ship transfer technology used in Bahia Blanca terminal.
Argentina has instead provided outlets for investment banks, trading houses
and majors that have limited access to markets elsewhere.
Chile is yet another important market emerging in the region, capable of
sustaining healthy and prolonged demand levels to attract spot cargoes.
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Louise Boddy Head of Gas, Power, Carbon & Coal ICIS Heren t: +44-20-7911-1948 f: +44-20-7911-1851 e: firstname.lastname@example.org www.icis.com/heren Roman Kazmin LNG, Asia Pacific ICIS Heren t: +65-6780-4360 f: +65-6789-8898 e: email@example.com www.icis.com/heren
Louise Boddy, Head of Gas, Power, Carbon & Coal, ICIS Heren, t: +44-20-7911-1948, f: +44-20-7911-1851, e: louise.boddy at icisheren.com; Roman Kazmin, LNG, Asia Pacific, ICIS Heren, t: +65-6780-4360, f: +65-6789-8898, e: roman.kazmin at icisheren.com
Tags: ICIS Heren, London, November 17, Portugal, South America, United Kingdom, United States of America