From Reuters:
Chevron’s $54 billion Gorgon LNG project – the world’s most expensive – may be forced to dump chunks of its early production onto an already saturated global spot market, as some Japanese clients warn they are unlikely to take up test shipments.
…Japanese buyers holding long-term supply contracts have in the past eagerly sought early cargoes, but some could pass on the test shipments with long-term prices well above spot prices languishing at four-year lows.
“At this point there is no plan,” a spokesman at Tokyo Gas said, when asked whether it planned to take the first of the test, or commissioning, cargoes.
The firm has a contract to take 1.1 mtpa from the project.
A senior official from another Japanese client also said it was unlikely to buy these cargoes.
“If there’s spot supply that’s cheaper than Chevron’s offer price, then we’ll not take from Chevron,” said the official, who declined to be identified.
…Japanese buyers will take nearly a third of Gorgon’s output once commercial sales start, but if test shipments are not taken up then up to 2.4 million tonnes of LNG could hit spot markets leading up to April, Reuters calculations based on company data showed.
And so, the MB forecast of customers dumping contract cargoes onto the spot market comes to pass.
Next stop: contract ‘renegotiations’.
