Business

Japan pays least since 2005 for LNG amid price slump

Bloomberg

Japan, the world’s biggest buyer of LNG, paid the lowest price in about 11 years for the fuel last month amid a global oversupply.

The average price of LNG shipments into the country was about $6.32 per million British thermal units in April, the least since August 2005, according to Bloomberg calculations based on preliminary data from the Finance Ministry.

Prices are expected to rebound in the coming months as crude values have surged, according to Junzo Tamamizu, managing partner at Clavis Energy Partners LLC.

“With crude prices bottoming between January and February, LNG prices are set to rebound,” Tamamizu said. As Asian spot LNG prices are cheaper, “buyers would likely work harder to renegotiate with suppliers” to lower prices and get more flexibility, Tamamizu said.

Asia spot LNG fell 10 cents to $4.35/mmBtu from a week earlier, New York-based Energy Intelligence said on the website of its World Gas Intelligence publication on May 18. SLInG weekly spot price gained 1.5 percent to $4.36/mmBtu, according to an assessment by Singapore Exchange Ltd. on May 16.