LNG purchases suspended on high prices
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摘要:THE government has halted liquefied natural gas (LNG) purchases from the spot market for individual cargoes because of rising prices as the Northern Hemisphere winter approaches, an official at the country’s only importer said Thursday.Shenzhen-b..

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THE government has halted liquefied natural gas (LNG) purchases from the spot market for individual cargoes because of rising prices as the Northern Hemisphere winter approaches, an official at the country’s only importer said Thursday.

Shenzhen-based Guangdong Dapeng LNG Co. bought no spot LNG cargoes for immediate delivery this month and has no plans for December purchases, the official said, asking not to be identified because of company regulations.

China has supplemented a term contract for supplies from Australia by buying seven spot cargoes from Oman, Algeria and Nigeria since the Dapeng terminal started operating in May 2006. Imports fell to a four-month low in October after China paid its highest price to date for a spot cargo, customs figures released in Beijing last week show.

LNG prices in Asia look set to remain robust until April, David Thomas, a London-based analyst at Citigroup Global Markets Inc., said in a Nov. 21 report.

Gains in LNG prices, boosted by demand from Asian rivals Japan and South Korea, make it unlikely China will return to the market for cargoes for immediate delivery before March, the official said.

“Our company conducts LNG procurement consistent with international LNG industry practice and we are dedicated to meet the needs of Guangdong and Hong Kong customers in the short and long term,’’ Thomas King, president of Guangdong Dapeng LNG, said, declining to give details on purchases.

Japan’s Tokyo Electric Power Co. plans to increase imports of LNG to a record in the next business year after an earthquake in July closed its Kashiwazaki Kariwa nuclear plant, the world’s largest. South Korea is buying LNG cargoes to build up inventory before the winter heating season, Citigroup’s David Thomas wrote.

China imported 296,305 metric tons of LNG last month, the least since July, the customs office said Nov. 22. Those purchases include an Algerian spot cargo of 60,068 tons that cost US$9.25 a million British thermal units and 236,238 tons from Australia under term contracts for US$3.19 a million British thermal units.

The price paid for last month’s Algerian cargo exceeds the US$8.46 a million British thermal units paid for LNG from Oman in April and the US$8.79 a million British thermal units paid for Algerian LNG in July.

The terminal at Shenzhen has a contract to buy about 3.3 million tons of the fuel a year from Australia for 25 years.

LNG is natural gas that has been chilled to liquid form, reducing it to one-six-hundredth of its original volume at minus 161 degrees Celsius (minus 259 Fahrenheit), for transportation by ship to destinations not connected by pipeline. On arrival, it is turned back into gas for distribution to power plants, factories and households.

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