Japan’s October LNG Import Costs Rise 11 Percent on Oil

Japan, the world’s biggest importer of liquefied natural gas, paid 11 percent more for the fuel in October compared with a year earlier as crude oil climbed.

Prices for delivered LNG rose to 47,318 yen ($563) a metric ton from 42,783 yen, according to data from the Ministry of Finance and on Bloomberg. That’s equivalent to about $10.79 per million British thermal units, more than twice the price of U.S. benchmark gas futures at Henry Hub. October LNG prices declined by 2.3 percent from September.

Japan’s purchases of the cleaner-burning fuel increased 9.5 percent to 57.9 million tons in the first 10 months from a year earlier as Asian economies rebounded from a global recession. The region’s LNG imports may expand 8 percent this year after declining 3 percent in 2009, Facts Global Energy said in July.

“The glut observed in global LNG markets for the past two years off the wave of new liquefaction capacity and the loss of demand from the global recession is likely to clear more quickly,” according to a report yesterday by Goldman Sachs & Co. analysts led by Samantha Dart in London.

Imports of the fuel in October climbed 9.5 percent to 5.2 million tons, according to the data. Japan purchased two spot cargoes in October from Yemen and Nigeria at an average price of about $432 a ton, down from seven spot cargoes in September at an average $482 a ton. It secured two spot cargoes a year earlier costing about $558 a ton.

The January contract was at $86.78 a barrel in electronic trading on the New York Mercantile Exchange at 12:15 p.m. India time. Gas for January delivery was at $4.304 per million British thermal units in New York.

Benchmark gas in the U.K. for next month rose 3.6 percent to 56.2 pence a therm yesterday, its highest since Feb. 10, 2009, according to broker data on Bloomberg. That’s the equivalent of $8.76 per million Btu and is the benchmark for spot LNG prices in Asia.

LNG is natural gas that’s chilled to liquid form, reducing it to one-six-hundredth of its original volume for transporting by ship to destinations not connected by pipeline.

To contact the reporter on this story: Dinakar Sethuraman in Bangalore at dinakar@bloomberg.net.

To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net.

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