Sabine Pass likely to reexport LNG cargo to Brazil: Bentek

Monday, December 03, 2012

The vessel LNG Capricorn, which has LNG capacity equivalent to 2.6 Bcf of gas, arrived at the Sabine Pass LNG terminal Saturday and is expected to re-export a cargo out of the Louisiana facility to Brazil, Bentek Energy LNG analyst Javier Diaz said Monday.

The LNG Capricorn previously re-exported two cargoes out of Sabine Pass, and both were delivered to Brazil, said Bentek, a unit of Platts.

"This will be the third cargo to be re-exported from Sabine Pass in 2012," Diaz said. "Previously, the Seri Balquis loaded a cargo on January 8 that was re-exported to Japan's Futtsu for [a free-on-board] price of $12.40/MMBtu, according to [US Department of Energy] data. And, on February 21, the Arctic Spirit loaded a cargo that was re-exported to Japan's Sodegadura for an FOB price of $11.20/MMBtu, according to DOE."

Sabine Pass has received three cargoes this year, Diaz said. The first, on February 18, was a long-term contract delivery from Norway. The second and third deliveries, on July 5 and November 9, respectively, were short-term purchases from Trinidad and Tobago. The delivered ex-ship price for the July 5 delivery, sold by GDF Suez, was $13.50/MMBtu, according to DOE data.

"Brazil has been importing large volumes of LNG as hydroelectric power production has dropped due to drought," Diaz said. "Assuming the landing price for the most recent LNG re-export was similar to the $13.50/MMBtu reported for the July 5 delivery, the DES cost to Japan would be near $18/MMBtu, much higher than current JKM prices would support at $15.85/MMBtu."

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