Bloomberg: Asian LNG Set to Rise as Premium at Two-Year Low: Energy Markets

Liquefied natural gas prices in Asia are poised to reverse an eight-week drop that brought them to a two-year low relative to cargoes for Europe as Japan faces delays in starting nuclear reactors.

LNG for northeast Asia has fallen 22 percent from a record in February, cutting its premium to shipments for southwest Europe to as little as $1.40 a million British thermal units, data from World Gas Intelligence show. Asian prices may soar about $5 to more than $20 per million Btu by September, according to Sabine Schels, an analyst at Bank of America Corp. in London.  

The current Asian premium isn’t high enough to attract LNG cargoes from Nigeria and Trinidad, the biggest suppliers of spot shipments behind Qatar, away from Europe, according to data from Poten & Partners Inc., a New York-based consultant. Japan, once the world’s third-biggest nuclear power producer, probably won’t start any of 52 reactors still halted since the March 2011 earthquake as new safety rules take effect and will have to burn LNG for power generation, according to Wood Mackenzie Ltd. MORE