Commodity pricing agency S&P Global Platts will begin assessing prices for liquefied natural gas (LNG) delivered to the Middle East and Pakistan in the Platts Middle East Marker (MEM), reflecting growing imports into a region better known as an exporter, CPI Financial reported.
The Egyptian port of Ain Sukhna will be used as the main point for the Platts price marker. Deliveries into other ports will be assessed by applying a freight cost factor. The MEM price assessments will also be based on a delivered ex-ship (DES) basis to ports in the Middle East that are able to receive shipments with a minimum cargo size of 135,000 cubic meters, according to Reuters.
S&P Global Platts’ Global Director, Shelley Kerr, said: “Our analysis indicates a greater tendency for new entrants in the region to use short term purchasing strategies, which is creating additional liquidity. This liquidity is further compounded by the participation of trading companies who are willing to take on the additional price and credit risk associated with these new buyers.”
This came as Demand for LNG in Dubai, Egypt, Jordan, Kuwait and Pakistan has grown close to tenfold since 2010 to 20.8m million tons per annum in 2016, with Egypt taking about one-third of those imports. Moreover, Egypt and Pakistan have recently launched or awarded huge tenders for short-term and medium-term supplies, looking to take advantage of a gas glut stoked by new output from Australia and the United States.