LNG prices soar as China faces winter gas crunch
Published by Will Owen,
Editor
LNG Industry,
According to Reuters, China is bulk buying LNG cargoes worldwide, pushing LNG spot prices above those for oil-indexed cargoes, as energy providers scramble to avoid a looming winter supply crunch.
China has moved millions of households from burning coal to natural gas this year, pushing up import demand amid an Asian market that is already tightening.
Most Asian LNG supplies are delivered under long-term contracts with prices linked to crude oil, however, with the upcoming winter heating season, Chinese utilities have turned to the spot market in desperation to cover themselves in order to meet surging demand (tankers have been chartered from as far away as Norway).
A similar short-term supply crunch late last year boosted spot Asian LNG prices by more than 80% in the last four months of the year, and pushed China’s December 2016 imports to a record 3.7 million t – nearly double the 2016 average of just 2 million t per month.
With millions more households having moved to gas since then, last year’s record is expected to be smashed this year.
“The Chinese are in panic mode. They clearly underestimated the push in demand from their gasification program. Now they are soaking up LNG spot cargoes where they can. And suppliers are happy to deliver, at a premium,” said a major commodity merchant trader.
Asian spot LNG prices have soared by more than two-thirds since May to US$9 per million British thermal units (mBtu), above oil-linked prices of around US$8 per mBtu.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/03112017/lng-prices-soar-as-china-faces-winter-gas-crunch/
You might also like
HAM Italia inaugurate first LNG-CNG refuelling station in Italy
HAM Italia and the HAM Group have inaugurated the first EDUX LNG-CNG refuel-ling station in Italy, located in Via del Camposanto.