LNG price in Asia is skyrocketing due to China’s electricity crisis and European demand

SINGAPORE (Reuters) – Liquefied natural gas (LNG) prices in Asia soared this week as the world’s largest buyer China faced a power shortage and low inventories in Europe, increasing competition for super refrigerated fuel.

FILE PHOTO: A liquefied natural gas (LNG) tanker is pulled towards a thermal power plant in Futtsu, east of Tokyo, Japan, November 13, 2017. REUTERS / Issei Kato

The average price of LNG for November delivery in North East Asia was estimated at around $ 37 per million metric British thermal units (mmBtu), up almost 16% from the previous week, have indicated industry sources.

December delivery prices were estimated to be around $ 38 per mmBtu, they added.

Pricing agency S&P Global Platts Japan-Korea-Marker (JKM), which is widely used as a benchmark in the spot market, hit a record high of $ 56.326 per mmBtu on Wednesday, before slowing down later in the week.

“The market is still very bullish for the winter and any stock uplifts morale,” said a Singapore-based trader.

Gazprom’s China-focused Amur gas processing plant in Russia’s Far East halted operations after a fire on Friday morning, a plant spokesperson told Reuters.

The wider implications were not immediately clear, but the plant plays an important role in Russian gas exports to China, which has been hit by power shortages that have led to electricity rationing in all the countries.

Bangladesh bought a shipment of LNG from Vitol for mid-October delivery at $ 35.89 per mmBtu and another from Gunvor for late October delivery at $ 36.95 per mmBtu, which are the highest prices. paid by the country for cash shipments, an official from Petrobangla said. noted.

Freight rates to ship LNG have increased this week and are at multi-month highs as increased demand for LNG has increased the need for ships to move supplies, sources said.

Production issues in Sakhalin and Indonesia are also supporting prices, a Singapore-based source said.

Pakistan could consider relying only on forward supplies if current spot prices remain high, an industry source said.

Reporting by Jessica Jaganathan; Editing by Rashmi Aich

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