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Asia’s LNG Prices Rise to Record Levels Supported by Strong Regional Demand and

The prices of Liquified Natural Gas (LNG) in Asia reached to seasonal record levels amid strong regional demand and surging European gas prices. After conclusion of the last week, LNG delivered to Northeast Asia crossed USD 16/MMBtu which is highest in the last 8 years.

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Asia’s LNG Prices Rise to Record Levels Supported by Strong Regional Demand and

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  1. Asia’s LNG Prices Rise to Record Levels Supported by Strong Regional Demand and Surging European Gas Prices The prices of Liquified Natural Gas (LNG) in Asia reached to seasonal record levels amid strong regional demand and surging European gas prices. After conclusion of the last week, LNG delivered to Northeast Asia crossed USD 16/MMBtu which is highest in the last 8 years. The regional demand in Asia remained high due to strong demand from India which witnessed Petronet LNG and Indian Oil Corp closing tenders for two cargoes in the upwards of $15/MMBtu for August and September and to be delivered to Dahej. The sectors driving India’s Liquified Natural Gas imports are fertilizers and bulk chemicals both maintaining strong consumption levels of LNG. Another reason for strong regional demand is the rising intake from China which has experienced the halting of spot selling activity from multiple Chinese companies as demand picked up in China and ex-terminal trucked Liquified Natural Gas prices rose sharply. Surge in power consumption in Japan and South Korea also supports the bullish sentiment for Liquified Natural Gas in Asia. Liquified Natural Gas supplies were constrained during the second quarter owing to the planned and unplanned turnarounds in Australia, Malaysia, and Indonesia. Australia’s Ichthys LNG Plant delayed the restart of production after it went for maintenance due to technical issues. Demand remained robust throughout the quarter and sentiments remained bolstered as China’s CNOOC sought for around 10 LNG cargoes between July to March 2022, indicating the country’s robust economic growth. South China’s LNG demand also gained considerably due to Moreover, June shipments to Japan rose by 18% and in China by 27% on year-on-year basis. At a particular week in June, the average LNG price for July deliveries for the Northeast Asian region crossed USD 12.10 per mmBtu, gaining about $1.15 from the previous week’s levels.

  2. As per ChemAnalyst, “prices of Liquified Natural Gas are expected to remain high due to surging European Gas Prices which are strongly related to the rising coal and carbon prices. The prices of coal and carbon are unlikely to fall in the short term due to high mining and energy costs related to coal and carbon mining.”

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