Spot LNG prices for front-month cargoes started to climb from their previous rock-bottom levels during the four weeks from mid-July to mid-August. Higher prices came as the market’s attention started to move towards the winter, and on the back of some unexpected production outages in Australia.
The ICIS EAX price for spot LNG deliveries to east Asia during September averaged $2.808/MMBtu, rising 29% from the average price for deliveries during August. With most of the world’s key LNG importers being in the northern hemisphere, physical demand for LNG for heating will grow as the market heads towards the fourth quarter.
Traders also said that problems at Australia’s Gorgon LNG plant were affecting sentiment. The Australian plant had been expected to bring its second 5.2 million tonnes per annum train back from maintenance in July, but delayed the return to September after discovering cracks in equipment. Concerns were then raised that the problems affecting the train could also affect the other two trains at the plant, meaning that they too could require work in the future.