China's CNOOC tenders to sell spot LNG: UpdateOREANDA-NEWS. China's state-owned CNOOC has issued a tender to sell one October and one November LNG cargo from the 8.5mn t/yr BG-operated Queensland Curtis LNG (QCLNG) facility in Australia.

One cargo is offered on a fob basis for 19-23 October loading. The other cargo is on a des basis for delivery on 18-19 November. Bids are due on 8 September and valid until 11 September.

The cargoes would have been allocated as part of a commercial arrangement that the firm has with BG, as CNOOC has a 50pc stake in QCLNG's first train.

They are unlikely to be scheduled cargoes in the firm's annual delivery programme or commissioning cargoes from the project's second train.

CNOOC has two long-term supply agreements with BG totalling 8.6mn t/yr, which BG is expected to fulfil mainly through QCLNG. Deliveries under the contract began in May with the start of commercial operations at train one.

The second train loaded its first cargo in July and is in its commissioning phase.

CNNOC may be marketing two cargoes next and six cargoes/yr in both 2017-18, with a view to issue a full tender at a later date, market participants said. But a CNOOC official said the firm does not expect to have additional spot cargoes in the next few years.

Market participants are not surprised that a key northeast Asian importer is contemplating selling cargoes. Spot demand in China, as well as elsewhere in the region, has been weak this year, driven by a slowing economy.

Other Chinese importers are expected to become sellers, with the domestic market likely to be oversupplied from next year.

Chinese state-controlled oil firm Sinopec has a 7.6mn t/yr supply agreement with the 9mn t/yr Australia Pacific LNG project that is scheduled to ship its first cargo in September-October.

And fellow state-controlled importer PetroChina has a 2mn t/yr contract with Australia's 15.6mn t/yr Gorgon LNG facility. Gorgon is expected to start up early next year. It initially targets the start of operations in late 2015.

Other projects, including the Malaysia PLNG 1 and Sabine Pass in the US, are scheduled to begin operations from the end of this year. The associated increase in LNG supply is expected to weigh on spot prices.

Any spot cargoes that Chinese importers may look to sell will have to compete with cargoes from these new projects, as well as existing Asia-Pacific developments that all have had an excess of supply this year.

The ANEA, the Argus assessment for northeast Asia des, stood at \\$7.66/mn Btu for second-half October deliveries yesterday. It was \\$7.625/mn Btu for deliveries in both halves of November.