GLOBAL LNG-Asia LNG prices slip despite strong competition, limited Russian supply

By Marwa Rashad and Jessica Jaganathan

LONDON/SINGAPORE, Oct 22 (Reuters) - Asia liquefied natural gas (LNG) prices slipped this week but are expected to remain at high levels on concerns over low European gas storage levels due to strong competition from Asia and diminishing hopes for more gas supply from Russia.

The average LNG price for December delivery into Northeast Asia was estimated at about $34.50 per metric million British thermal units (mmBtu), down $3.90 from the previous week, industry sources said.

Prices for November delivery were estimated at $34, down $4.50 from last week.

"Currently, fundamentals in Asia remain relatively stable as demand in China is picking up which is offsetting weak demand in Japan," a London-based industry source said.

"With the first sign of colder-than-normal temperatures expected to come in to the region, there could be some early-season heating demand, and with Europe still structurally undersupplied, global prices will remain supported until risk of cold weather fully passes," he added.

China's Beijing Gas was looking for a cargo for delivery over December to January, an industry source said.

Others were waiting on the sidelines for prices to drop further, a Singapore-based trader said.

Adding to the energy crunch in Europe, Russian gas giant Gazprom booked only a third of additional gas transit capacity via the Yamal-Europe pipeline via Poland for November while not booking any volumes via Ukraine.

There are also ongoing and projected production outages which could remove an incremental 4% of monthly supply, or 20 LNG cargoes, from the expected market between November and February, Rystad Energy said.

Shipping rates which have more than doubled from earlier this month are also expected to put upward pressure on prices.

A gas shortage in Singapore is also expected to boost demand for LNG from the city state.

In tenders and deals, Kuwait Petroleum Corp sought five cargoes for next year, while Japan's Tohoku Electric bought six cargoes from BP for delivery in the first half of 2022, sources said.

Integracion Energetica Argentina (IEASA) and the Electricity Generating Authority of Thailand (EGAT) sought two cargoes each for November to December delivery.

Cargo offers were also seen from Abu Dhabi, Angola LNG, Russia's Novatek and Sakhalin Energy. (Reporting by Marwa Rashad in London and Jessica Jaganathan in Singapore; editing by Jason Neely)