Petronas inks first Canadian-indexed LNG deal
May 7, 2021 3:05:pm
Summary
by: Dale Lunan
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Petronas inks first Canadian-indexed LNG deal
Malaysian state Petronas LNG (PLL) said May 7 it had introduced a new LNG pricing index based on the AECO gas trading hub in Canada. It had just sold a spot LNG cargo to an Asian buyer for delivery in August.
Petronas said the sale of the spot cargo based on AECO pricing is a significant step towards establishing a transparent price index in the LNG market to not only complement Petronas’ pricing diversification for cargoes but also for the supply of LNG from the Anglo-Dutch Shell-led LNG Canada project. It said it is due to start commercial deliveries in 2024.
SINGAPORE: Malaysia s state-owned Petroliam Nasional Bhd said on Friday it had signed its first liquefied natural gas (LNG) deal using a Canadian pricing indexation as basis.
Petronas LNG sold a spot LNG cargo to a buyer in the Far East for August delivery using the Canada Alberta Energy Company (AECO) index, the company said.
AECO is a Canadian natural gas price benchmark, similar to the Henry Hub index in the United States, but is not typically used as a pricing basis for LNG spot contracts. In Asia, the S&P Global Platts Japan-Korea-Marker (JKM) has been increasingly used as pricing basis in spot contracts.
Feed gas deliveries to U.S. liquefied natural gas (LNG) export terminals have been near capacity, flowing at almost 12 Bcf each day over the last week.
The European natural gas market is helping drive U.S. export demand. Prices on the continent closed higher last week. The Dutch Title Transfer Facility finished at $6.620/MMBtu and the UK’s National Balancing Point settled at $6.531 ahead of the Good Friday holiday.
European markets were closed for Easter Monday, but colder weather late last week along with strong natural gas demand being created by the need to replenish depleted storage stocks pushed prices higher.
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