By Chen Aizhu and Marwa Rashad
SINGAPORE/LONDON, Jan 26 (Reuters) - Unipec, the oil and gas
trading arm of China's Sinopec Corp has awarded
fewer-than-planned cargoes in a recent tender to sell up to 45
cargoes of liquefied natural gas for 2022 deliveries, three
traders said, dispelling the bearish sentiment that had been
fuelled by the rare sell tender.
Earlier this month, Sinopec issued the tender of the
super-chilled fuel to take advantage of high Asian spot prices
<LNG-AS>, according to traders who were invited to bid.
Under the tender, Sinopec offered two to five cargoes each
month between February and October on a delivered ex-ship basis.
"The awards were about five to seven out of 45 cargoes, they
were very picky about prices," one European trader said.
Chinese and Asian buyers - who used to compete for LNG
shipments in a tight market- have recently stayed away from the
spot market due to higher prices and ample inventories, sending
LNG prices down amid tepid demand.
The high number of cargoes initially sent bearish signals to
the market but the limited number of awarded cargoes meant
bearish sentiment no longer exists.
"The small number of cargoes awarded possibly means that the
cargoes they offered do not have that kind of flexibility buyers
asked for. But Sinopec seemed quite sure that these are the
redundant supplies for China’s off-peak seasons, as they're
among the best informed guys of the domestic Chinese market," a
Singapore-based trader said.
Another Singapore-based trader said the winners included
Total, Glencore, BP, Shell and Chevron and that awards were at
JKM prices plus 10 cents or more.
Sinopec declined to comment on the tender results, but a
company representative said that Unipec global LNG purchases and
sales "are primarily (aimed) to serve domestic demand, balance
off excessive supplies and swap delivery slots to boost the
firm’s profitability."
"It’s hard to predict the domestic and international market
this year amid an array of factors, it added.
(Reporting by Marwa Rashad in London and Chen Aizhu in
Singapore; Editing by Paul Simao)
Glencore (GLEN)
BP (BP.)
