Unipec buys over 40 LNG cargoes in strip tender for June 2021-Feb 2022: sources

Singapore — Unipec -- a trading arm of Chinese national oil company Sinopec -- recently purchased over 40 LNG cargoes in a strip tender for deliveries in the period of June 2021-February 2022, sources with the tender document told S&P Global Platts April 8.

The tender closed on April 6 and was valid till April 7, with a preference for JKM-linked offers, while Brent-linked, TTF-linked and fixed price offers were also acceptable, according to sources.

Sources added that there was no mention of the number of cargoes the company was seeking.

Market sources said that a total of 40-50 cargoes were awarded, about 5-6 cargoes per month, with at least 30 cargoes awarded on a JKM-linked basis, less than 10 on Brent-linked and a couple on TTF-linked and fixed price basis. Most cargoes awarded in Q3 and Q4 2021 were heard at discounts to the monthly averages of JKM, with greater discounts for the former quarter.

The companies that were awarded in the tender include BP, Vitol, Litasco, Gunvor, RWE, Mitsui, SixOne, Shell, Qatar Petroleum, Gazprom and Glencore, according to multiple trading sources, with the first five having sold at least five cargoes to the Chinese firm.

The strip tender issued by the Chinese national oil company signaled the start of the gas injection period into their underground gas storage Wen 23, with a working capacity of 10 Bcm, which typically begins in June each year, sources noted. Sources also stated that they could be looking to secure volumes for the winter period in advance.

Multiple strip tenders were also issued in September and October by Sinopec Gas' subsidiaries, including Sinopec Great Wall, for winter supplies.

Sinopec Great Wall closed a tender early-Sept 2020 for more than 10 cargoes over the period of November 2020 to March 2021. The cargoes were heard mostly awarded at discounts to the monthly averages of JKM, Platts reported earlier.

Meanwhile, Unipec purchased approximately 10 cargoes in another strip tender, which closed in late-October 2020 for the November 2020-January 2021 period.