The hottest LNG prices fell, benefiting Asian buye

2022-08-14
  • Detail

LNG prices fell, Asian buyers benefited

according to the U.S. Wall Street, with billions of dollars of investment flowing into natural gas production and export around the world, there are signs that natural gas supply has kept up with demand

LNG prices in Asia have fallen to record lows this year, so buyers can bargain further in the negotiations. Considering that the United States will begin to deliver liquefied natural gas in late 2015, the fear of a possible shortage of natural gas in the future has evaporated, at least in the near future

in its latest interim natural gas report, the International Energy Agency said that the pressure on the global supply and demand balance of liquefied natural gas is rapidly decreasing, and market concerns have changed from how to meet demand to how to absorb supply. According to the report, this change will change the LNG market in the next few years

in the spot market in May, the price of liquefied natural gas in Asia fell below $7/1million British thermal units (BTU), which is the lowest price since the Fukushima nuclear accident forced Japan to shut down nuclear power plants in March 2011. At present, the price of liquefied natural gas is about one third of the highest price of $20/1million BTU last year

the International Energy Agency predicts that by 2020, the global LNG export capacity will increase by a total of 164 billion cubic meters, an increase of 40% over the current level. Australia will contribute 44% of the new supply, so by the end of the second decade of this century, Australia will become the world's largest exporter of liquefied natural gas. The United States will contribute 35% of the new supply, ranking second. It will rank third among the global LNG exporters, and Qatar will rank second

with the substantial growth of natural gas production, the LNG market in Asia is changing

after the Fukushima nuclear power plant accident, Japan imported a large amount of liquefied natural gas for power generation. The price of liquefied natural gas in Asia rose sharply, so that in the next few years, liquefied natural gas as far away as Europe was sold to the Asian market. However, since the price of liquefied natural gas began to fall in the fourth quarter of last year, there has not been a cargo ship carrying liquefied natural gas from Europe to Asia

the contract terms of LNG buyers are also changing. Until recently, the supply of liquefied natural gas was mostly carried out in accordance with the strict terms set by large natural gas companies. The buyer usually promises a 20-year contract period, and the price is calculated by a formula related to oil price, and often with some conditions, such as the prohibition of resale of goods, which is still valid even after the goods leave the port

as market dynamics become favorable to buyers, buyers choose short-term contracts, some of which have a term of only one year. At the same time, pricing arrangements have become more flexible

Matthew Arnold, global LNG director of EDF trading, a subsidiary of EDF SA, a European energy company, said at a recent Platts meeting that the decision is now entirely in the hands of the buyer. They can choose a quotation linked to oil, a quotation linked to port Henry, or a price based on European natural gas

port Henry is a storage and delivery location in Louisiana, and its price is regarded as the benchmark for all U.S. natural gas pricing

insiders said that the trading terms, which were rarely disclosed publicly, were changing, which was a common method adopted in the 670s and 10s of the last century. The method became more and more transparent, and the pricing became less complex

the stagnation of Asian demand has also accelerated change. Japan's nuclear reactors are slowly restarting, and South Korea has a large inventory of liquefied natural gas. Kirbky believes that when burns, car accidents, trauma and other skin defects are caused, China has obtained cheaper natural gas from transmission pipelines in Turkmenistan and other places. Consumers in these countries are seeking more favorable terms than existing contracts

bmi research analysts said in a report that Asian buyers are in a strong position in the negotiations for further concessions

the increase in North American natural gas exports is bound to increase supply and drive market competition to become more intense. The U.S. Department of energy has issued approval documents for 10 natural gas projects, allowing them to deliver natural gas to countries that have not signed free trade agreements with the United States, so that those exporters have access to major markets such as China and Japan. Four of these projects are under construction, and one is expected to start exporting later this year

U.S. LNG exporters said they would allow buyers to resell in the spot market, giving buyers the opportunity to sell natural gas from order 1 continuous extrusion of thermoplastic films to the production of honeycomb structures. Qatar and other natural gas exporting countries are not the case, and the country requires that the natural gas exported must be delivered to the designated place

steve hill, head of energy marketing and transportation at BG Group, said that the structure of U.S. LNG exports will be very different from traditional supply. The pricing concept is different, more flexible, less restrictive, and the entry threshold is low. Buyers from China, Japan and South Korea have begun to take advantage of the shipment prospects of liquefied natural gas in the United States, hoping to obtain lower prices and more favorable conditions from sellers such as Russia

note: the reprinted content is indicated with the source. The reprint is for the purpose of transmitting more information, and does not mean to agree with its views or confirm the authenticity of its content

Copyright © 2011 JIN SHI