Breaking News

RPT-LNG giant Qatar's empty shelves pose upside risk for Asian gas prices

CommoditiesNov 15, 2017 12:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. RPT-LNG giant Qatar's empty shelves pose upside risk for Asian gas prices

(Repeats with no changes)

By Oleg Vukmanovic

LONDON, Nov 15 (Reuters) - Gas exporting giant Qatar has all but sold out of winter supply after committing its spare output to China and South Korea, a development that could tighten Asia's gas markets as the peak demand season bites.

Doha's bumper sales will also ring alarm bells for other regions reliant on Qatari liquefied natural gas (LNG) such as Europe and may further boost Asian spot prices LNG-AS , which have already surged 55 percent since September, traders said.

Despite widespread forecasts of an LNG glut, China's shift to gas this year as it moved millions of households away from coal to combat smog has lifted its LNG imports by 43 percent and squeezed global gas markets.

But some traders are split on the sustainability of the rally, citing weather, crude oil price movements and the degree of residual demand left in China as big unknowns that could potentially dampen prices.

Normally Qatar plays the role of swing supplier to global LNG markets, churning out cargoes to cover demand spikes.

This time, Asian markets face a knife-edge balancing act as state-run Qatargas - catering to China, Japan and Europe - is booked out until April while peer Rasgas - covering South Korea, Taiwan and India - holds just a handful of free cargoes in February and March, trade sources and analysts said.

"If the winter is harsh then Asia will have to pay up to secure supplies and with new projects in Russia and the U.S. too delayed to provide much relief, prices will rise again," a senior LNG analyst at a major provider said.

Qatargas, in the process of absorbing Rasgas to create a single Qatari LNG player, did not reply to requests for comment.


A large part of China's surplus demand was filled by Qatar through fresh sales and even tweaks to existing long-contracts, according to trade sources and customs data.

The producer shipped 600 percent more LNG to China in May from a year ago, 77 percent more in June, 400 percent more in July, 150 percent more in August and 215 percent more in September. O/CHINA7

That trend should continue through the winter, traders said, as the Gulf state adapts to long-term buyers' needs to hold on to its share of the prized Asian market.

Qatar also found buyers beyond China as rising coal GCLNWCPFBMc3 and crude oil LCOc1 prices and nuclear supply shortfalls propped up spot LNG demand in India, Taiwan and South Korea, further emptying its shelves.


Qatar's absence from spot markets may be felt in higher LNG prices which some traders predict may hit three-year highs above $11 per million British thermal units (mmBtu) this winter, from $9.40 per mmBtu currently.

The shift in sentiment has bulls wondering whether forecasts of global LNG markets re-balancing in the early 2020s may not be wide of the mark given the quickening pace of Chinese consumption growth.

Bears urge caution, however, ahead of the imminent start-up of new liquefaction plants in the United States, Russia and Australia and the alternatives to LNG that Beijing has on offer.

For example, China's piped gas imports from Central Asia and Myanmar soared to a record 3.4 million tonnes in September, the latest month for which data is available and well ahead of the 2.5 million tonnes shipped in by tanker.

PetroChina is also near the limit on how much more LNG it can bring into its fully booked import terminals this winter, though peer CNOOC has room for manoeuvre, fuelling trader speculation of potential gas swaps if shortfalls emerge.

"My personal view is that China will remain quiet as they have already contracted the LNG they need," a trader said.

RPT-LNG giant Qatar's empty shelves pose upside risk for Asian gas prices

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Write your thoughts here
Replace the attached chart with a new chart ?
Post also to:
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email