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+--- Thread: $21.413/M = Asian LNG $ Record (/showthread.php?tid=2826)
$21.413/M = Asian LNG $ Record - Tree - 02-20-2013
The ICIS East Asia Index (EAX) March contract for physical LNG closed at $21.413/MMBtu on Friday, 15 February, marking the highest Asian spot LNG assessment recorded by ICIS.
ICIS LNG Analyst Simon Ellis said: “The near-term cause for the price rise has been competition from South America, as Brazil has purchased unprecedented levels of spot LNG to offset the fall in hydroelectric generation caused by a prolonged drought.“
“The tight market conditions have been exacerbated by unscheduled production problems at LNG plants, as well as the recommitment of spot LNG volumes to mid- and long-term contracts,” Ellis added.
ICIS’ March South America Index (SAX) reached a record $18.447/MMBtu on 15 February.
The ICIS DES (delivered ex-ship) Japan assessment was also assessed at a record high of $21.50/MMBtu on 15 February.
Prior to 2013, the ICIS DES Japan assessment was last quoted at more than $20.00/MMBtu on 5 September 2008.
ICIS Heren became the first price reporting agency to assess East Asian spot LNG prices in March 2008.
RE: $21.413/M = Asian LNG $ Record - admin - 02-20-2013
That stuff is setting daily new highs, how about that for timing..
RE: $21.413/M = Asian LNG $ Record - Palm - 02-20-2013
Stop the madness!! This has to stop or the bidders will be forced to pay IOC $3/mcf to even have a chance. Too bad management didn't jump at the chance 3 years ago to sell at .25/mcf.
RE: $21.413/M = Asian LNG $ Record - admin - 02-20-2013
To liquify this stuff from E/A costs what? $3/mcf? Can't be much more, might very well be less. You can sell it for $15-20/mcf. It isn't exactly rocket science to see an opportunity here even at substantially lower LNG prices.
RE: $21.413/M = Asian LNG $ Record - Tree - 02-20-2013
'admin' pid='17529' datel Wrote:To liquify this stuff from E/A costs what? $3/mcf? Can't be much more, might very well be less. You can sell it for $15-20/mcf. It isn't exactly rocket science to see an opportunity here even at substantially lower LNG prices.
|
PNG LNG - 6.9 Mtpa - $19 bn - 15 yrs. $3.83/Mcf - Conditioned Gas Cost $0.86/Mcf - LNG Plant/Export cost $4.69/Mcf CAPEX
Gulf LNG - 8 Mtpa - $9.3 bn - 15 yrs. $0.34/Mcf - Conditioned Gas Cost $0.9/Mcf - LNG Plant/Export Cost $1.24/Mcf CAPEX
PNG LNG's Conditioned Gas Cost delivered to the LNG Plant costs 11 x Gulf LNG Conditioned Gas. |
.....And if not for the CEO hubris, incompetence and greed we could have had that $.25/M deal 3 yrs. ago like Palm said!!
RE: $21.413/M = Asian LNG $ Record - Tusker - 02-20-2013
'Tree' pid='17524' datel Wrote:
The ICIS East Asia Index (EAX) March contract for physical LNG closed at $21.413/MMBtu on Friday, 15 February, marking the highest Asian spot LNG assessment recorded by ICIS.
ICIS LNG Analyst Simon Ellis said: “The near-term cause for the price rise has been competition from South America, as Brazil has purchased unprecedented levels of spot LNG to offset the fall in hydroelectric generation caused by a prolonged drought.“
“The tight market conditions have been exacerbated by unscheduled production problems at LNG plants, as well as the recommitment of spot LNG volumes to mid- and long-term contracts,” Ellis added.
ICIS’ March South America Index (SAX) reached a record $18.447/MMBtu on 15 February.
The ICIS DES (delivered ex-ship) Japan assessment was also assessed at a record high of $21.50/MMBtu on 15 February.
Prior to 2013, the ICIS DES Japan assessment was last quoted at more than $20.00/MMBtu on 5 September 2008.
ICIS Heren became the first price reporting agency to assess East Asian spot LNG prices in March 2008.
These is just amazing market forces. Argentina booked (28?) cargo moves for 2013... Brazil is coming in to the LNG Market for additional energy due to wheather varible that can tread for years at a time... Peru has met future cargos for Japan.
The commitment to meet the 75-85 MTPA void 2016-2020 needs those major LNG projects to be on schedual. I do not believe all will be done. Can a Singapore based trading spot market handle the demand? Yes... but at a cost.
Cheers
RE: $21.413/M = Asian LNG $ Record - ArtM72 - 02-20-2013
Brazil's hydro power industry is rapidly developing but apparently can't keep up with growth. Here's an article about how thermo electric (i.e. gas) plants have been added over the past decade and discusses the current (periodic?) drought putting their national grid at risk.
http://www.bbc.co.uk/news/world-latin-america-21055803
Whether long term contracts can be reached for $10 or $12 or $14/mcf, even at $6 (the break even cost of production for unconventional wells providing the bulk of new gas in the US) the cash generation of IOC's resource is amazing with somewhere around a $4 margin. A $4 margin on 4 mtpa generates $800 million per year. An $8 margin, $1.6 billion, or $3.2 billion per year with 8 mtpa.
That's awfully close to today's IOC market cap at $3.6.
RE: $21.413/M = Asian LNG $ Record - trans - 02-20-2013
I may be wrong, but I would never try to value on commodity spot prices. I have focused on the long term contract basis, which I believe is likely in the $11-13 eventually, especially when new production comes on line, say 2015-17. That's still a lot of money for IOC. imo
RE: $21.413/M = Asian LNG $ Record - Tree - 02-20-2013
'trans' pid='17541' datel Wrote:I may be wrong, but I would never try to value on commodity spot prices. I have focused on the long term contract basis, which I believe is likely in the $11-13 eventually, especially when new production comes on line, say 2015-17. That's still a lot of money for IOC. imo
Agree Tran, there has been a shift in recent years to medium term LNG contracts and players dabbling in Spot Mkt. to supplement supplies, Those buyers have been burned. I recall IOC intending to hold a % of production for feeding the Spot Mkt. where larger returns will remain for years. I'm happy to leave these details up to Conrad Kerr! He's likely greedy too.
RE: $21.413/M = Asian LNG $ Record - johnwgrant - 02-20-2013
China’s Shale Gas No Revolution as Price Imperils Output: Energy
http://www.bloomberg.com/news/2013-02-19/china-s-shale-gas-no-revolution-as-price-imperils-output-energy.html
Excerpts:
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China, consuming energy at the fastest pace among major economies, has set ambitious targets to exploit its reservoirs of shale gas, the same fuel the U.S. touts as the means to energy independence. It won’t meet them.
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China is spending $17 billion a year on natural gas imports, about half in the form of liquefied natural gas. The country will open a record number of LNG receiving terminals this year, proving a boon for more than $100 billion of projects being built by companies such as Exxon Mobil and Chevron Corp. in Australia and Papua New Guinea.
The lack of shale enthusiasm was evident in December at the government’s latest and biggest auction of blocks of land containing natural gas trapped in shale rock strata. Coal miners and provincial government investment firms with no experience of shale drilling were among winning bidders. The bids by the big two gas producers and China National Offshore Oil Corp., the largest offshore oil producer, failed.
Awarding shale gas prospects to inexperienced companies in the second auction and government price controls on natural gas are likely to ensure imports continue to rise.
China imported $8.3 billion worth of liquefied natural gas last year, up 41 percent from 2011. Piped gas comes mainly from Turkmenistan.