SINGAPORE, Jan 21 (Reuters) - Asian liquefied natural gas (LNG) spot prices dropped to multi-year lows on Tuesday with at least one cargo being sold into Northeast Asia below the psychological barrier of $4 per million British thermal units (mmBtu).
Gas prices are tumbling globally as new projects sanctioned when prices were higher ramp up output just as economic growth slows. A milder than usual winter in North Asia is also curbing demand.
Low spot prices will particularly hit companies which purchase LNG through long-term contracts, selling on to end-users at market prices, traders said. The contracts are typically priced relative to oil prices, with many currently estimated at more then double the spot price.
Brunei LNG export plant sold a cargo for March 30-31 delivery at about $3.90 to $3.95 per mmBtu, which traders say is the lowest in years and the lowest ever for this time of the year.