Asian spot LNG prices fell sharply during the week of Jan. 16, with a pickup in supply forcing a Russian producer into accepting lower bids, while prices in southern Europe held firm.

The Asian price of LNG for delivery in March fell to $8 per million British thermal units (MMBtu), traders said, 25 cents below the week of Jan. 9.

In a week of thin trade, the sale of two shipments loading in March from Russia's Sakhalin II export plant--fetching $8/MMBtu--was a key price marker even though the winning bid appeared to be an outlier, according to some trade sources.

Rival bids may have been as much as 70 cents below the winner, indicating the depth of bearish sentiment after production restarts from Angola and Australia last week boosted supply.

More supply is also being offered from ExxonMobil Corp.'s (NYSE: XOM) Papua New Guinea project, Indonesia's Donggi-Senoro project, Angola and Abu Dhabi, as well as Australia's AP LNG, Gladstone and North West Shelf projects.

And added supply feeding into Cheniere Energy's Sabine Pass liquefaction plant may indicate that a new production line, known as Train 3, is nearing completion, according to analysts.

However, some traders indicated a potential unplanned outage affecting Qatargas Train 1, which mainly supplies Spain and Japan, although this could not be confirmed and Qatargas did not respond to requests for comment.

If confirmed, the outage could tighten supply in Japan and exacerbate exceptionally tight markets in Spain that are already sending gas prices surging.

This week, commodity trader Gunvor emerged as the winner of Pakistan's five-year supply tender, having submitted by far the lowest bid (expressed as a percentage of a barrel of crude oil) of 11.6347%.

Italy's Eni won the portion of the tender seeking supplies over 15 years with a 12.29% bid.

"The market is focusing on all the tenders that were issued this week," a Singapore-based trader said, adding that deal activity was thin.

Europe, in particular, was receiving attention as its markets stayed globally competitive due to a supply drought in southern France and cold weather sweeping Spain.

The pole reversal--with Spain and France ousting Asia as the top bidding market--looks set to reduce incentives for sending unsold shipments from the U.S. and other Atlantic producers to the Far East, as markets closer to home increasingly offer better returns, some traders said.

A force majeure at Algeria's Skikda export plant, running into its fourth week, is partly to blame for a lack of LNG deliveries into the south of France, lifting prices.

Cold weather in Portugal may have contributed to Galp Energia picking up an Angolan shipment.

"Portugal's purchase of the Angola LNG cargo via tender is a sign that demand in the Atlantic basin is strong," the Singapore-based trader said.