Asian prices slip as China stays away amid lackluster demand

European countries have reported 100 percent gas storage levels. (AFP)
Updated 05 October 2019

Asian prices slip as China stays away amid lackluster demand

  • LNG prices have been at multi-year seasonal lows for much of the year despite increasing consumption as China’s demand growth stabilizes

LONDON: Asian spot prices for liquefied natural gas (LNG) slipped this week, with many Chinese and other regional players absent from the market due to the Golden Week holiday and no respite seen from rising supplies.

The average LNG price for November delivery into northeast Asia was estimated at $5.55 per million British thermal units (mmBtu), down from $5.75 per mmBtu last week.

There were few trades done in a quiet market due to the week-long vacation in China as well as a public holiday in South Korea, traders said.

On the Platts window, Shell sold a cargo to Vitol for delivery between Nov. 28 and Dec. 2 to Tianjin, China for $6.25 per mmBtu.

Several November cargoes were offered this week — by Abu Dhabi National Oil Co.  from its Das Island plant on a delivered-ex-ship basis and from the Ichthys LNG plant in Australia, sources said.

Angola also offered a cargo for end-October loading, one source said. On Friday, Kinder Morgan’s Elba Island plant in the US state of Georgia became the fourth to start up this year. US exports so far this year have equalled the 2018 total of the world’s No. 3 exporter, Malaysia.

In Europe, natural gas prices at the Dutch hub rose with the switch of the front month to the November contract but the outlook, in the absence of any sharp drop in temperature forecasts, was bleak.

Dutch front-month prices, a European benchmark, traded at around 16 euros per megawatt hour, or $5.15, compared to $3.51 at the end of September. That was far below the $9.38 they fetched at the same time a year ago.

European countries such as France, Austria and Poland reported gas storage 100 percent full with tanks across the continent 97.4 percent full on average, data from Gas Infrastructure Europe showed on Friday.

While consumption has begun to increase with the onset of colder weather, the continent remains well supplied. Fields in Norway and Britain are not expected to ramp up supplies this month by as much as they normally do, analysts said.

Turkey’s Botas bought four winter cargoes at a discount to the Dutch benchmark, said one source who interpreted the award of the tender at such a price as a sign the sellers did not want to add to the oversupply in Europe.

Egypt meanwhile lowered gas prices fixed for the cement, metals and ceramic industries by between $1.50 and $2.00 to $5.50 to $6.00 per mmBtu.

Despite the bearish outlook, European gas traders are keeping an eye on several issues that may curtail supplies or boost demand including concerns over some French nuclear reactors and a Russia-Ukraine transit agreement.

US sanctions on Chinese oil tankers meanwhile spilled over into LNG with a number of ice-classed LNG tankers, serving the Yamal facility in northern Russia, blacklisted due to their partial ownership by a sanctioned Chinese entity.

LNG shipping rates for the Pacific basin jumped to $75,000 per day, from $61,000-$65,000 last week. Sources said this was due to seasonal demand for tankers coupled with additional demand stemming from new projects coming onstream.

UAE dives into Lake Manzala project

Updated 21 September 2020

UAE dives into Lake Manzala project

  • Egyptian campaign aims to return the lake to its previous state and revive local fishing industry

CAIRO: The UAE National Marine Dredging Company (NMDC) has announced that it won the rights to the expansion project of Lake Manzala in Egypt, valued at 600 million UAE dirhams ($163 million).

The company’s announcement of the new project came following a disclosure published on the Abu Dhabi Securities Exchange website. It ensures compliance with the principle of disclosure and transparency in force in the UAE.

Lake Manzala is one of Egypt’s largest natural lakes. It is known for its potential fishing opportunities, as it has the basis for high fish stocks due to natural nutrients and a moderate climate throughout the year. It produces about half of the natural fish production in lakes.

The lake has witnessed neglect in recent years, losing much of its importance and wealth. In May 2017 Egyptian President Abdel Fattah El-Sisi launched a national project to develop Egyptian lakes, with a key focus on Lake Manzala.

NMDC said in a statement that winning the project came through its partnership with the Egyptian-Emirati Challenge Company. It said that it will take about two years to implement the project.

NMDC is one of the leading companies in the field of dredging, land reclamation and civil and marine construction in the Middle East. The Lake Manzala development project aims to improve the quality of water to restore free fishing and return the lake to its previous state, which will boost the local market and export output.

President El-Sisi said that Lake Manzala will contribute to enhancing Egypt’s fishing industry, and export operations will be activated after its full development. He directed the border governorates, in coordination with the Ministry of Interior and the Armed Forces, to remove all encroachments and criminal outposts on the lake.

Several days ago, Dakahlia governorate completed a difficult operation to remove encroachments on the lake. A large campaign that used Armed Forces Engineering Authority equipment removed 301 houses in the Abdo El-Salhy area in El-Matareya city, known as the “fishermen’s land,” which was built on areas that were filled in from the lake. The operation occurred after local fishermen were persuaded to obtain compensation for vacating their houses.

Magdy Zaher, executive director of Manzala Lake, said that the engineering authority used 320 excavators and 20 imported suction dredgers to work in the lake.

The authority dredged the upper islands isolated from the water with the help of an Emirati bulldozing company to increase the efficiency and purification of Lake Manzala.

Zaher said the lake project will require several steps.

The most important is the removal of encroachments on the water surface and doubling its area to 250,000 feddans, he said. Dredging and deepening the lake, opening the gates and extending the radial channels to allow Mediterranean waters to enter the lake will follow, he added.

A safety belt will come in the form of a road 80 km long and 30 meters wide, which will surround the lake and prevent future encroachments. It will also divert the course of the Bahr El-Baqar water treatment plant, which pours 12 million cubic meters of sanitary, industrial and agricultural drainage into the lake, Zaher said.