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Global spot, short-term LNG trades in 2010 up 40% on year to 727 cargoes

https://www.chemnet.com   May 11,2011 Platts
Global spot and short-term LNG trades spiked 40% year on year to 727 cargoes in 2010, compared with 491 cargoes in 2009, due to more attractive spot and short-term LNG prices, and uncommitted supply from the Middle East, according to a report issued by GIIGNL, the global association of LNG buyers.

The rise of spot and short-term operations was particularly significant in Europe, which saw a 50.9% increase, boosting the share of spot and short-term deals in global LNG trades to 18.9% in 2010, up from 16.3% in 2009.

Asia experienced renewed growth in spot and short-term LNG buying after a sharp decline in 2009 on the back of the global financial crisis, purchasing 611 cargoes in 2010, an increase of 17% year on year. This was still short of the 812 spot and short-term LNG cargoes the region bought pre-crisis in 2008.

"[South] Korea and Japan alone accounted for 38.2% of additional spot and short-term volumes. By way of comparison, Europe was responsible for 38.5% of additional spot and short-term quantities," the association said.

Japan remained the leading LNG importer with 2,369 cargoes in 2010, a gain of 8.7% on 2,179 shipments in 2009, but the north Asian nation's share of global buying dropped slightly year on year to 31.7%, from 35.3% in 2009.

South Korea's share of LNG imports gained to 1,100 cargoes, up 30.3% year on year from 845 shipments, increasing the country's share of global imports to 14.8% in 2010 from 13.8% in 2009.

"In 2010, India was the only Asian country to reduce its appetite for LNG, as a result of growing domestic production," GGIGNL added.

The year 2010 also saw increased demand from south America and the entry of a new buyer, Dubai, which imported three cargoes in November.

"The appetite for LNG in South America [Argentina, Brazil, Chile] grew strongly, mainly as a result of gas demand for power generation. Imports by the three countries almost tripled and reached 194 cargoes, bringing South America's global LNG market share to 2.6% at the end of 2010," the association said.

Non-producers such as financial institutions and oil trading companies' activities in the spot and short-term market grew in 2010, along a significant number of re-exported cargoes from the US and Belgium.

A total of 19 cargoes -- seven from Belgium's Zeebrugge, eight from Sabine Pass and four from Freeport LNG in the US -- were re-exported, with 10 cargoes heading to destinations in the Atlantic Basin, and nine heading to destinations east of the Suez canal.

As to the sourcing of spot and short-term trades in 2010, Qatar overtook Trinidad and came first with a 25.7% share, followed by Trinidad (17.2%), Nigeria (12.3%) and Egypt (7.3%), GIIGNL said.

In 2010, new flexible volumes from Qatar contributed to 45.3% of the new spot and short-term volumes on the market, followed by Nigeria (18.8%) and Yemen (12.6%), the association added.

GIIGNL defines short-term imports as contracts with a duration of four years or less.

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