Asian LNG prices tumble as supply floods market

Traders say LNG cargoes may struggle to find a home. (AFP)
Updated 23 November 2019

Asian LNG prices tumble as supply floods market

  • Singapore’s Pavilion Energy has taken the unusual step of canceling the loading of a cargo from the US

SINGAPORE: Asian spot prices for liquefied natural gas (LNG) fell this week as a supply glut continued to weigh, while demand growth was muted by signs of a mild winter in Northeast Asia.

Prices for January delivery to Northeast Asia are estimated to be about $5.70 per million British thermal units (mmBtu), down 20 cents from last week for the same period, said several sources who are market participants.

With European gas storage nearly full, cargoes may struggle to find a home, traders said.

Singapore’s Pavilion Energy has taken the unusual step of canceling the loading of a cargo from the US, but has agreed to pay for it, several industry sources said.

A company spokeswoman said Pavilion evaluated scheduling and other commercial matters and took the decision not to lift the cargo in coordination with the supplier.

Supply was ample with several LNG plants offering cargoes this week.

Angola’s LNG project offered a cargo for delivery in January to as far as Indonesia, while Australia’s Ichthys and Papua New Guinea LNG plants offered a cargo each for December, sources said.

Indonesia’s Tangguh LNG plant, which is operated by oil major BP, also offered five cargoes for delivery over the first quarter of next year, sources added.

Some buy tenders from Thailand were finalized with PTT’s Singapore trading unit awarding a tender to buy more than 10 LNG cargoes for delivery over a year from March, 2020, a company official said.

State-run Electricity Generating Authority of Thailand (EGAT) has awarded its first spot tender to import LNG cargoes for delivery in December this year and in March next year, industry sources said.

It is also seeking government approval to import one more spot LNG cargo for next year, one of the sources said.

South Korea’s SK Energy and POSCO were jointly seeking a cargo for delivery in the second half of December, industry sources said, although further details of the tender were not immediately available.

Low spot prices also attracted some demand from India, with Indian Oil Corp. seeking a cargo for delivery on Dec. 17, industry sources said.

“The low prices may be creating some end-user demand in India which is attracting purchase interest in the international market,” a source familiar with the Indian market said.


Saudi Aramco shares soar at maximum 10% on market debut

Updated 11 December 2019

Saudi Aramco shares soar at maximum 10% on market debut

  • Company is now world’s largest publicly traded company, bigger than Apple

RIYADH: Saudi Aramco shares opened at 35.2 riyals ($9.39) on Wednesday at the Kingdom’s stock exchange, 10 percent above their IPO price of 32 riyals, in their first day of trading following a record $26.5 billion initial public offering.
Aramco has earlier priced its IPO at 32 riyals ($8.53) per share, the high end of the target range, surpassing the $25 billion raised by Chinese retail giant Alibaba in its 2014 Wall Street debut.
Aramco’s earlier indicative debut price was seen at 35.2 riyals, 10 per cent above IPO price, raising the company’s valuation to $1.88 trillion, Refintiv data showed.
At that price, Aramco is world’s most valuable listed company. That’s more than the top five oil companies – Exxon Mobil, Total, Royal Dutch Shell, Chevron and BP – combined.
“Today Aramco will become the largest listed company in the world and (Tadawul) among the top ten global financial markets,” Sarah Al-Suhaimi, chairwoman of the Saudi Arabian stock exchange, said during a ceremony marking the oil giant’s first day of trading.
“Aramco today is the largest integrated oil and gas company in the world. Before Saudi Arabia was the only shareholder of the company, now there are 5 million shareholders including citizens, residents and investors,” said Yasir Al-Rumayyan, the managing director and chief executive of the Saudi Public Investment Fund.
“Aramco’s IPO will enhance the company’s governance and strengthen its standards.”
Amin Nasser, the president and CEO of Saudi Aramco, meanwhile thanked the new shareholders for their confidence and trust of the oil company.
The sale of 1.5 percent of the firm, or three billion shares, is the bedrock of Crown Prince Mohammed bin Salman’s ambitious strategy to overhaul the oil-reliant economy.
Riyadh’s Tadawul stock exchange earlier said it will hold an opening auction for Aramco shares for an hour from 9:30 a.m. followed by continuous trading, with price changes limited to plus or minus 10 percent.

The company said Friday it could exercise a “greenshoe” option, selling additional shares to bring the total raised up to $29.4 billion.
The market launch puts the oil behemoth’s value at $1.7 trillion, far ahead of other firms in the trillion-dollar club, including Apple and Microsoft.
Two-thirds of the shares were offered to institutional investors. Saudi government bodies accounted for 13.2 percent of the institutional tranche, investing around $2.3 billion, according to lead IPO manager Samba Capital.
The IPO is a crucial part of Prince Mohammed’s plan to wean the economy away from oil by pumping funds into megaprojects and non-energy industries such as tourism and entertainment.
Watch the video marking Aramco’s opening trading: