ENN LNG (Singapore) Pte Ltd, has agreed via a tender to buy about 26 cargoes of liquefied natural gas (LNG) for 2022 and 2023 to replenish stocks as new storage becomes operational, reports Reuters.
About the agreement
The cargoes were bought at premiums of about $1-2 per million British Thermal Unit over Title Transfer Facility, or TTF, a virtual trading point for natural gas in the Netherlands, on a delivered basis, said one of the sources.
The two-year agreement was in addition to a 10-year tender ENN issued in March, as ENN’s east China-based receiving terminal has since last August expanded in handling capacity thanks to a newly started pipeline to a provincial grid.
Reason for picking TTF pricing
ENN picked TTF pricing instead of Japan Korea Marker (JKM) because the Netherlands-based TTF benchmark is more liquid and has more tools to hedge pricing risk than the latter, said the trader who has direct knowledge of the matter.
ENN added two storage tanks each sized 160,000 cubic metres around the end of June at its Zhoushan terminal, the source added.
As a result, ENN’s imports of the super chilled-gas will likely amount to 5 million tonnes this year, nearly doubling the volume from that of 2020, the source said.
Record LNG imports
China has bucked the trend by making record imports of LNG in May, a typically low demand season, and may have extended peak purchases into June, buoyed by industrial and power demand.
But multi-month high Asian spot prices are set to slow imports in the coming months as importers find it increasingly difficult to pass on the cost to consumers, traders said.
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Source: Reuters
