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US exports fill Asia's LNG demand gap

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LNG Industry,

Reuters are reporting that US LNG exporters are sending tankers to Asia to fill a gap in the region's demand, as markets have tightened more-than-expected on surging consumption in China and Pakistan as well as Australia's continuing struggles to ramp up scheduled production.

Benefiting from the Panama Canal expansion last year that allows bigger ships to cross from the Gulf of Mexico into the Pacific, around a dozen LNG cargoes from the US have gone to Asia since December.

US spot natural gas costs just US$3.21 per mmBtu, while Asian spot LNG prices have soared over 80% since June last year to almost US$10 per mmBtu.

Along with Cheniere, Royal Dutch Shell, and Spain's Gas Natural Fenosa (GNF) have been active exporters from Louisiana to Asia.

The expected surge in Pakistani demand is occurring as colder-than-normal winter weather in North Asia has increased LNG requirements.

China's 2016 LNG imports surged 30% from 2015 to over 25 million tpy, making it the world's third-biggest LNG importer behind Japan and South Korea.

Including India and Taiwan, the world's five largest LNG consumers are now in Asia, using about 70% of globally traded LNG.

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