LNG: May 24-28: Japanese power companies move to build inventories for summer
In Japan, several power companies moved on spot purchase for summer cargoes. Fearing that the power reserve ratio might fall after the end of the rainy season, the companies were responding to the government's request and moved to build inventories. At present, facilities such as JERA's No.1 and No.2 units (600MW each) at the Anegasaki thermal power plant were shut down due to old age and no restarts were heard but power companies were bringing forward their facility maintenance to ensure there was no power shortage in summer. JERA seemed to have purchased at least two spot cargoes for June to July delivery by mid-May. Further, Tohoku Electric Power, which had bought about five cargoes for June to July delivery closed a buy tender on Friday for a cargo for Aug 11-15 delivery to the 8.50 mil mt/year Niigata terminal. Apart from this, Chugoku Electric Power also appeared to have spot demand.
Among Japanese power companies, only Kansai Electric Power had supply room and continued to carry out spot sale. So far, the company was believed to have sold a total of three cargoes for June to July delivery. Kansai Electric offered a new cargo loading Jul 19 from the 9.00 mil mt/year Australia Pacific LNG (APLNG) project via a tender closed on Thursday. Kansai Electric Power had procured several spot cargoes by May but since the 826MW No.3 unit at its Mihama nuclear power plant would restart in end-June, it was seen to have some surplus LNG.
--FOB Middle East, DES South Asia, South east Asia and the Middle East
Egyptian Natural Gas Holding Company (EGAS) had sold two cargoes loading on Jun 3-4 and 25-26 at the Idku terminal with the production of 7.2 mil mt/year via a tender closed on Tuesday as previously reported. The former was sold to Vitol at $9.07 and the latter was sold to Gunvor at $9.17.
--FOB Atlantic, DES Europe and South America
Brazil's state-run Petrobras secured at least 4 cargoes after early May for June and July delivery. There were views that the prices of most of the cargoes were concluded at a single-digit discount to the July contract of the TTF natural gas futures market in the Netherlands. Brazil was seen to face with a shortage in gas supply along with a reduction in pipeline gas from neighboring Bolivia and with the onset of a high-demand winter season. These factors forced Brazil to rely more on LNG imports for power plants.