Jul 9, 2021

Asian based LNG importers seek to avoid costly spot buys

riskmanagement
Strategicprocurement
marketnews
LNG
2 min
Rebuffing spot buys, Asian LNG importers seek alternative options to satisfy additional seasonal demand

When the market conditions are right, spot buys can mitigate your risks and potentially save you some dollars. Customs data from the Ministry of Finance shows that a year ago, this was this case, with some Japanese importers picking up June or July deliveries at approximately $2/MMBtu. Meanwhile, shipments imported through long-term contracts were coming in around $8-$11/MMBtu for the same time period.

Volatility has increased, with record highs and lows being recorded in a period of 9 months. Between 2020 and 20201 market dynamics have been turned on their heads.

Today, as spot pricing currently hovers above most contract pricing and with market prices for Liquefied Natural Gas (LNG) expected to remain above that of legacy crude-linked contracts for most of 2021, buyers are opting to optimise their buys through contracts and are spurning spot. 

To help close the gap caused by the seasonal summer spike in demand, Asian based LNG importers are seeking alternative options such as making adjustments to Annual Delivery Programs, swapping cargoes, or exercising Upward Quality Tolerance (UQT) with long-term contract suppliers.

"Last year we saw [some importers] exercising [Downward Quality Tolerance] but this year, it's the opposite. They want to lift as much as their long-term volumes", said a Singapore based trader.

An Asia-Pacific based producer said, "There are quite a lot of requests from end-users for earlier delivery of [Annual Delivery Program]"

 

Some Asian LNG importers still preferring long-term contracts 

Somewhat constrained supply paired with increasing oil demand over the coming two months has some Asian importers still preferring long-term contracts.

S&P Global Platts Analytics expects oil stocks to be drawn down and crude oil prices to surge before dropping back in Q4. 

"With a lag, JCC prices are likely to go above $75 per barrel in August and September before retreating to under $70 per barrel by the year-end", stated S&P Global Platts analyst Kang Wu.

While the spot market remains high, look forward, the market is expected to slowly taper down over the next three years.

"The LNG spot market is expected to stay relatively tight through at least 2023, and JKM is forecast to stay above $8.00/MMBtu on an annualized basis until 2024 when a new wave of liquefaction projects will come online",  S&P Global Analyst Jeff Moore commented.

 

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Jul 26, 2021

Critiqom land four-year multi-million-pound procurement deal

Procurement
Critiqom
sustainability
technology
3 min
Communications Specialist, Critiqom, secures four-year multi-million-pound agreement for supply of postal services with Scottish Procurement

Critiqom, a Scottish-based communications business, recently announced its ground-breaking multi-million deal, which will see those accessing services through Scottish Procurement given the option to modernise their communications approach. 

By providing an increased amount of choice in communications, the company says it will succeed in ensuring a reduced environmental impact linked to mail production. 

The Opus Trust Communications company, which is accessed by the likes of local authorities, police, universities, central government, and other public sector bodies, insists that choosing a local supplier to aid in enhancing the efficiency of public sector communications would subsequently speed up its goal to go green.

“This is an opportunity to look at the bigger picture and to use our knowledge to accelerate change for public sector organisations in Scotland,” says Director at Critiqom, Gerry Crawley. 

“We know that we can deliver great efficiencies and cost savings by encouraging the public sector in Scotland to adopt a new approach that embraces digital technologies.”

The tender also introduced a second lot, focusing on digital communications and hybrid mail, in an attempt to administer reduced costs for its customers. All services within the framework agreement will also be delivered in-house. 

It seems the overall aim for the deal with Scottish Procurement lies with innovating and modernising the communications sector, resulting in lower prices and an increased focus on sustainability. 

Who is Critiqom?

Based in Bellshill, Scotland, Critiqom supplies omnichannel solutions for companies, businesses, and organisations, all while claiming to provide innovation and drive engagement simultaneously with reducing the costs of its operations. 

Its vision: to become the UK’s multi-channel communication service of choice. But how is it aiming to get there?

Critiqom insists that by spearheading customer communications with partnership and modernisation, they can achieve exceptional levels of service and choice delivered to their clients. By churning out consistently high-quality operations and by generating revenue with an emphasis on sustainability, it intends to achieve the reduced costs in communications that its clients are looking for. 

Why sign the deal now?

Increasingly, more and more companies are being put under pressure to ensure their carbon footprint and sustainable strategies are aligned with, or surpassing, competition in their field. As attention is drawn to the climate and concerns arise over the sustainability of large companies in the future, the majority of businesses are battling with time to decrease their impact on the environment and ensure policies are put into place to show their progress.

Crawley states that, where possible, the company aims to provide as little distance as necessary between manufacturing and the recipient. The tender boldly claims it looks to help steer the direction in which organisations think and showcase how digitalising communications can only serve to benefit the economy and environment on a large scale.

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