BS: Japan’s November LNG Import Bill Increases 6% as Crude Oil Gains
Dec. 29 (Bloomberg) -- Japan, the world’s biggest importer of liquefied natural gas, paid 6 percent more for the fuel in November compared with a year earlier as oil costs climbed.
Prices for delivered LNG rose to 46,596 yen ($566) a metric ton from 43,963 yen, according to data from the Ministry of Finance and on Bloomberg. That’s equivalent to about $10.85 per million British thermal units, more than twice the price of U.S. benchmark gas futures at Henry Hub. November LNG prices declined 1.5 percent from October.
Japan’s purchases of the cleaner-burning fuel increased 9.7 percent to 63.4 million tons in the first 11 months of this year as Asian economies rebounded from a global recession. The region’s LNG imports may expand 12 percent this year and 5 percent next year after falling 3 percent in 2009, Facts Global Energy, a Singapore-based consultant, said on Dec. 22.
“The glut observed in global LNG markets for the past two years off the wave of new liquefaction capacity and the loss of demand from the global recession is likely to clear more quickly,” Goldman Sachs & Co. analysts, led by Samantha Dart in London, said in a Dec. 1 report.
Imports of the fuel in November climbed 11 percent from a year earlier to 5.8 million tons, according to the data. Japan purchased five spot cargoes from Egypt, Nigeria and Equatorial Guinea at an average price of $493 a ton, about 14 percent higher than what they paid for two spot cargoes in October, according to the data. It secured three spot cargoes a year earlier at an average $715 a ton.
LNG prices are linked to crude oil, which was at $91.42 a barrel in electronic trading on the New York Mercantile Exchange at 1:40 p.m. Singapore time. Gas for February delivery traded at $4.253 per million British thermal units in New York.
Benchmark gas in the U.K. for next month closed on Dec. 24 at 58.89 pence a therm, climbing 72 percent this year because of colder weather, according to broker data on Bloomberg. That’s the equivalent of $9.05 per million Btu and is the benchmark for spot LNG prices in Asia.
LNG is natural gas that’s chilled to liquid form, reducing it to one-six-hundredth of its original volume for transporting by ship to destinations not connected by pipeline.
--Editors: Jane, Ching Shen Lee, John Viljoen
To contact the reporter on this story: Dinakar Sethuraman in Bangalore at dinakar@bloomberg.net.
To contact the editor responsible for this story: Clyde Russell at orcrussell7@bloomberg.net.
