* Papua New Guinea quake triggers LNG export force majeure
* “Beast from East” causes temperatures to plummet across Europe
* UK spot gas prices jumped to record, Asia LNG also up
By Henning Gloystein
SINGAPORE, March 2 (Reuters) - Global natural gas markets were roiled this week as an earthquake in Papua New Guinea caused a large-scale supply disruption of liquefied natural gas (LNG) while a late winter blast in Europe triggered unprecedented price spikes.
ExxonMobil Corp has declared force majeure on exports from its Papua New Guinea LNG project, which has been shut since a powerful earthquake on Monday, an industry source familiar with the matter said on Friday.
A company declares a force majeure when it is unable to carry out a contract because of forces beyond its control.
Exxon declined to comment on the force majeure.
As a result, Asian spot LNG prices LNG-AS jumped by 5 percent since last week, to $8.80 per million British thermal units (mmBtu).
Exxon is having trouble gauging the extent of the earthquake’s damage, given the remoteness of the gas field, in the mountainous jungles of Papua New Guinea, 700 km (435 miles) from the export terminal.
“It is difficult to assess the duration of production outages, but in our view, given the location and magnitude of the earthquake, as well as the scale of the aftershocks, we anticipate at least a month’s downtime is likely,” UBS bank said in an investor note on the earthquake’s likely impact on the LNG sector.
The outage has left several North Asian buyers seeking replacement cargoes in the spot market, leading to a further rise in market activity, which already hit records in January.
Several importers for China as well as Taiwan’s CPC Corp are seeking to replace disrupted contracted supplies from Papua with short-term delivery cargoes from the spot market, said three traders that participate in the market.
Other traders said on Friday the seasonal drop-off in demand in North Asia - which includes Japan, China and South Korea, the world’s top three buyers - as winter ends and temperatures rise prevented a bigger price rise.
Spot LNG prices for May were already $1 lower than April’s, at around $7.75 per mmBtu, the traders said.
The market situation has also been eased by increasing supplies from Malaysia’s Bintulu LNG export facility, which had seen disruptions in recent weeks, said two traders with knowledge of the matter.
While the winter in North Asia is showing signs of tapering off, most of Europe has been caught by a wave of extreme cold late in the season, which pushed up British spot natural gas prices to record highs of 275 pence per therm on March 1, the equivalent of over $30 per mmBtu, and up 130 percent from the last close in February, and up 400 percent since the end of December.
The spike was a result of extreme cold across western Europe, caused by unusual Siberian winds which the media has dubbed “The Beast from the East” and which caused a surge in gas demand for heating as temperatures plummeted.
European importers were vying with bids from Asia for spot LNG cargoes from Qatar and the United States, traders said.
With warmer weather approaching in most of Europe, traders said the supply squeeze would likely ease into next week.
Weather data in Thomson Reuters Eikon showed temperatures across most of western Europe will likely rise towards the seasonal norm of around 5 degrees Celsius (41 degrees Fahrenheit) within a week.
Reporting by Henning Gloystein in SINGAPORE; Additional reporting by Oleg Vukmanovic and Jessica Jaganathan in SINGAPORE and Sonali Paul in MELBOURNE; Editing by Christian Schmollinger