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Qatar reportedly seeks to make LNG spot market sales
POLICY
LEADING LNG producer Qatar is reportedly seeking to sell some cargoes of the super-chilled fuel on the spot market. The reports come after India’s Petronet LNG sought to delay contracted LNG deliveries from Qatargas as the Asian coun- try went into lockdown in response to the coro- navirus (COVID-19) pandemic. (See previous story) Qatar is India’s largest supplier of LNG.
Citing three sources familiar with the mat- ter, Reuters reported on March 26 that Qatar Petroleum (QP) had approached several buy- ers in Asia and Europe offering spot cargoes of LNG. The move is an unusual one for the LNG exporter, which typically relies on long-term offtake agreements to sell gas.
The volumes involved have not been spec- ified, but the sources said QP was offering the cargoes for loading or delivery in April, depend- ing on the location. Two other traders said Qatar was offering around 10 cargoes, the news service added.
As well as the force majeure notice issued by Petronet, it has been suggested by traders that a drop in European demand could be behind QP’s efforts to seek alternative buyers.
The impact of India’s lockdown appears to be already evident. Reuters cited a Kpler ana- lyst, Rebecca Chia, as saying the Al Sahla LNG tanker, which was supposed to head to Hazira in India on April 1 after loading a cargo from Qatar, was instead idled at Ras Laffan anchorage.
Different countries are taking varying approaches to COVID-19 and are at different points of tackling the outbreak. While India is going into lockdown, China is cautiously resum- ing industrial activity. And while European demand is expected to drop further as many countries there enforce their own lockdowns, there is some optimism that Asian countries will seek to take advantage of readily available sup- plies on the spot market.
Indeed, according to traders cited by Reu-
ters, QP recently sold two cargoes to Thailand’s
PTT for delivery in May at about $3.05-3.15 per Thailand’s PTT for million British thermal units ($84.36-87.13 per
1,000 cubic metres).
Separately, it was reported this week that Bangladesh was considering buying LNG on the spot market. The country apparently wants to make purchases by July in a bid to diversify beyond term contracts, meet growing demand and take advantage of favourable pricing.
State-owned Rupantarita Prakritik Gas Com- pany Ltd (RPGCL), a subsidiary of Petrobangla, has already signed a master sale and purchase agreement (MSPA) with 14 global suppliers sep- arately to buy spot cargoes of LNG.
Bangladesh already imports LNG from Qatar’s RasGas under a long-term deal. The country, which began importing LNG on a reg- ular basis in 2018, also has a long-term supply deal with Oman Trading International.™
QP recently sold two cargoes to
delivery in May.
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w w w . N E W S B A S E . c o m Week 12 26•March•2020