- SINGAPORE/LONDON: Qatargas will reduce output including condensates in October because of maintenance at its liquefied natural gas (LNG) plant, two trading sources with knowledge of the situation said.
As a result, European gas prices for autumn and winter shot up on Friday afternoon.
By 1345 GMT, the UK’s winter 2011/2012 gas contract had risen to 74 p/th, up from 71.60 pence per therm (p/th) in the morning.
The contract fell slightly below 74 p/th in the late afternoon.
The last time the contract was above 74 p/th was in April, when prices rose to 75.75 p/th.
“This (maintenance) comes at a delicate time, just when the winter heating season kicks off, and when the LNG market is already tightening because of Japanese thirst,” one gas trader said.
The Atlantic LNG market is already tightening as Japan is trying to compensate its nuclear power generation losses following the Fukushima accident in March through LNG cargoes.
This month Japan ordered its first Norwegian LNG cargo since 2008.
As most of Qatar’s LNG supplies to Europe is divertible and Asian LNG prices are higher than Europe’s, LNG deliveries originally intended for Europe are increasingly being diverted to the East.
Sources said rotating maintenance at three LNG trains, numbers 5, 6 and 7, between mid-September and early November will curb production.
Repairs at each train will last for about two weeks.
The company could not be immediately reached for comment.
Qatargas, one of two state-owned LNG producers, operates seven LNG trains with a capacity of 42 million tons per annum (mtpa).

