The Platts JKM for January was down 10 cents over the course of the week to $7.475/MMBtu on Friday, after rolling to become the new front month on Monday, November 16. Buying sentiment for the month continued to soften, with limited remaining demand left for the January period from buyers in Japan, Korea and China.
Trading also remained thin over the course of the week, with last deals heard coming from tenders in Australia and Papua New Guinea.
Multiple sources said the CNOOC tender for one cargo lifting December 25-26 from the BG-operated Queensland Curtis LNG, drew strong interest and was awarded in the high $7s/MMBtu to a portfolio supplier with a short position in the Middle East.
The Papua New Guinea tender offering two DES cargoes for late December and early January was heard to have sold at least one of its cargoes for delivery to Japan over December 25-30 or January 8-11 to a Tokyo-based utility buyer, with prices quoted lower in the mid-$7s/MMBtu.
Various sources said the PNG volumes were restricted to delivery in North Asia. The lack of greater destination flexibility combined with the larger delivered volume size of the PNG vessels presented some challenges for buyers, resulting in lower demand for those volumes, sources said.
Other sources commented that the price differential was also largely due to the higher shipping cost associated with shipping a cargo from the Australian Queensland Curtis LNG plant to the Middle East versus North Asia.
January demand from buyers was limited, as North Asian buyers remained out of the market following the conclusion of several annual delivery program discussions starting for the month.
While it had been difficult to secure January-March cargoes through the ADP process over the last few years, ADP negotiations this year were heard to have went smoothly, following warmer temperatures and lower demand to replenish inventories from buyers.
End-users were also reluctant to buy replacement volumes for February and March, citing ongoing demand uncertainty during the winter season.
Most of the remaining January demand was heard from buyers in India and Pakistan.
In India, IOC and GSPC were heard to have potential demand for December or January cargoes. A tender from IOC for one cargo per month over Q1 2016 had closed November 18, with validity till November 23.
India's GSPC had launched a tender for the 2016 strip last week, seeking six cargoes over 2016, a source said. The tender closed Tuesday, and called for a minimum of one cargo delivered in each quarter of 2016.
On the supply side, there reports of incremental cargoes available from Darwin, Bontang, Tangguh and PNG for late December and January.