Participants in the global LNG market are expecting more cargo deferrals due to weakened domestic gas demand amid containment measures to curb the spread of coronavirus imposed by many countries. Therefore, more LNG supply is expected to flood the spot market.
South Korea's Kogas has reportedly approached its main suppliers, including Qatargas and Malaysia's Petronas to delay shipments for May through October. Industry sources said that Kogas is facing high storage levels and struggling to receive term cargoes due to softer demand in South Korea. This deferral is expected to affect 9 million tons/year of LNG supplies from Qatargas and 2 million tons/year from Petronas.
Kogas' other suppliers include Australia's 7.8 million tons/year Gladstone LNG and Prelude plants, Oman's 10.4 million tons/year Qalhat plat, the US Sabine Pass facility, Indonesia's 2 million tons/year Donggi Senoro LNG plant, and Russia's Sakhalin LNG plant. It also has supply contracts with Total and Shell.
Asian LNG-consuming countries, such as India, Malaysia, Singapore, and Pakistan, have taken measures to fight the pandemic. Previously, LNG importers in China and India declared force majeure on their LNG term supplies after each country imposed lockdown measures. The force majeure weighed on prices for spot deliveries to northeast Asia and India, respectively.
