Maintenance delays at LNG facilities across Asia are expected to deteriorate the current supply glut, market participants said. According to them, capital expenditure cuts due to weak demand and the lack of workforce amid lockdowns and movement restrictions become the main reasons why producers postpone their turnaround plans.
Spot LNG prices in Northeast Asia fell to a new record low, dragged by the coronavirus pandemic, which caused weak demand, maintenance deferments, and long-term contract cancellations. India’s GSPC and GAIL have invoked force majeure on shipments due to arrive in March-April amid the country’s lockdown.
The JKM price, the benchmark for spot LNG price in Northeast Asia, fell to a new historic low of $2.263/MMBtu on Wednesday, marking its lowest point since February 2, 2009. JKM has declined by 19.1% since $2.797/MMBtu on Friday and by 13.7% so far this week.
Industry sources said that Asian LNG projects of QatarGas, Brunei LNG, Australia Pacific LNG, Gorgon, Woodside, and North West Shelf, have reportedly postponed maintenance plans. According to the sources, APLNG initially planned a scheduled turnaround at its Train 1 on May 8 to June 7, bit it was postponed to May 19-27
Woodside initially planned major maintenance at Train 3 at Karratha Gas Plant in late April. However, it was postponed to September 2020. Woodside also deferred maintenance at Train 4 to August 2021. Gorgon has also reportedly delayed maintenance at its LNG facility to an unspecified date. It was originally planned for May 23 to July 11. Brunei LNG and QatarGas also postponed their maintenance plans, but details on their turnaround program were not immediately available.
