Shanghai: China, the world's second-biggest energy consumer, resumed imports of spot liquefied natural gas cargoes in March after a six-month hiatus as prices of the cleaner-burning fuel tumbled, writes Bloomberg. China paid about $493 a metric ton, equivalent to about $9.4 per million British thermal units, on delivered terms for a spot cargo of 58,064 tons from Trinidad & Tobago last month, customs data released today showed.
Spot supplies of conventional-sized LNG cargoes to China ceased in October after China National Offshore Oil Corp. paid $20.43 per million Btu, a record, in September for a cargo from Algeria. The emergence of China may prop up spot prices that have fallen 70 percent from last year's peak because of the global recession, and divert tankers from the U.S. and Europe.
China imported at least three spot cargoes in April and paid less than $5 per million Btu on a free-on-board basis for a shipment from Russia, according to AIS Live ship-tracking data compiled by Bloomberg and an official. That's a drop of at least 75 percent from the September record high.
Spot LNG sells for $4.60 per million Btu, a 47 percent discount to crude oil, JPMorgan Chase & Co. said in a note on April 3. LNG sold for a premium to oil in 2008.
Asian LNG buyers typically pay a few dollars more than the cost of gas at the U.K.'s benchmark National Balancing Point to attract spot cargoes from Europe and the Americas, according to Andy Flower, an independent consultant and a former BP Plc employee.
U.K. natural gas for immediate delivery sold for $3.79 per million Btu and natural gas spot prices at Louisiana's Henry Hub, a global gas price benchmark, were at $3.52 per million Btu.
The $900 million LNG import terminal in Guangdong province, a venture between China National Offshore and BP Plc, suspended spot cargo purchases in September as demand from the nation's manufacturing hub eased and users couldn't pay record prices.
The Shanghai Gas Group Corp. operates Wuhaogou, the smaller of two operating LNG terminals in China, and hasn't halted its purchases of smaller, non-conventional-sized cargoes. A LNG cargo typically weighs between 55,000 and 65,000 tons.
The Shanghai facility paid about $14 per million Btu for a cargo of 8,419 tons from Malaysia last month. The terminal bought an LNG cargo in November and another cargo in January from Malaysia, paying about $22 per million Btu.
BG Group Plc and BP Plc supply cargoes from Trinidad while Royal Dutch Shell Plc is a partner in LNG projects in Russia and Malaysia.
Shipments under Australian term contracts to Guangdong jumped 40 percent in March to 255,295 tons from a year earlier, the customs data showed.
LNG is natural gas chilled to liquid form, reducing it to one-six-hundredth of its original volume at minus 161 degrees Celsius (minus 258 degrees Fahrenheit) for transportation by ships to destinations not connected by pipeline.
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