Russia’s Sakhalin Energy Investment Co offered its first spot liquefied natural gas (LNG) cargo to Asia since the country’s invasion of Ukraine — a key test of how keen buyers in the region are to handle the nation’s fuel.
The company released a sales tender offering a cargo for late-April loading from the Sakhalin-2 project just north of Japan, said traders with knowledge of the matter, who asked to remain anonymous.
Shell PLC has joined other oil majors in announcing plans to exit Russia in the face of international pressure, including selling its stake in Sakhalin-2, but Japanese partners in the venture are still holding on to their shareholdings and the controversial tender is likely to be closely watched.
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Despite surging prices driven by events in Europe, some traders expect limited interest as importers have avoided Russian shipments since the invasion.
There is also the possibility that the cargo could be bought by Russian suppliers and delivered under long-term contract volumes.
“We understand the North Asian buyers are only accepting contracted Russian cargoes at this time, but are refusing to handle new spot cargoes,” said Valery Chow, Asia-Pacific head of gas and LNG research at Wood Mackenzie Ltd.
Extreme prices and volatility are leading to “demand destruction in the near term,” he said.
Global LNG prices received new impetus as the UK and US ramped up measures to ban Russian fossil fuel imports. Europe’s gas benchmark reached an intraday record earlier this week.
Some companies have already started inquiring for cargoes to meet summer demand.
CPC Corp, Taiwan (台灣中油) was earlier this week seeking LNG for delivery to the nation from June to August, traders with knowledge of the matter said.
The Ministry of Economic Affairs said late last month that Taiwan did not face an imminent risk of supply issues regarding crude oil and LNG, as it had sufficient stores.
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