“The August ‘14 EAX contract was assessed for the last time on Tuesday, at $10.794/MMBtu, having shed $1.394/MMBtu since it rolled to become the front month on 16 June. The September EAX contract fell by $1.675/MMBtu over the same period to $10.863/MMBtu”, ICIS analyst said, adding that these levels were last seen this low in the immediate aftermath of the Japanese earthquake which caused the Fukushima nuclear disaster.
Accordingly, August demand appeared poor with only Japanese electricity utilities and Taiwan’s natural gas monopolist CPC interested in purchasing LNG cargo.
Any demand for the month appeared met by suppliers from within the Pacific Basin. Namely, as ICIS analysis said, Russia’s Sakhalin, Australia’s Northwest Shelf and Indonesian state oil company Pertamina all awarded tender cargoes into the region in the second half of June.
However, forecasts for the winter are more optimistic as prices are said to rise with the potential ramp-up from September of Sinopec’s Qingdao terminal, which is expected to absorb incremental cargoes from the PNG LNG plant in addition to its 2mtpa contract, as explained by ICIS.