Oil and Gas Corporation of India and National Petroleum Corporation of Gujarat recently purchased shipments of liquefied natural gas for immediate delivery after being absent from the market for months.
The hunt for natural gas is spreading to Asia’s developing economies as India and Indonesia join the game, putting pressure on global demand.
Oil and Gas Corporation of India and National Petroleum Corporation of Gujarat recently purchased consignments of liquefied natural gas after being absent from the market for several months. Indonesia – a major exporter – has asked its gas producers to prioritize local customers. Meanwhile, Thailand and Bangladesh are also rapidly seeking shipments of liquefied natural gas (LNG) through tenders in the past few days.
Rising interest from South Asia and Southeast Asia boosted demand from Europe, which pushed prices to record highs last month. Consumption of electricity and heating fuel, which normally increases during the northern winter period, has increased as major economies recover from the pandemic. Meanwhile, supply remains constrained due to investment in new projects over the past few years.
Buyers in South and Southeast Asia were surprisingly active in the commodity spot market for January-March, despite higher prices. Although these countries are among the most price-driven buyers of liquefied natural gas, they are forced to buy to avoid cutting supplies to households and industrial users.
The move is taking place most strongly in Pakistan, where gas shortages are limiting the country’s key textile exports, according to an industry trade organization.
One factor keeping prices from moving higher is ample stockpiles in China, which has overtaken Japan as the world’s largest importer of liquefied natural gas by 2021. Europe’s largest economy. Asia had last year to stockpile natural gas. According to analysts, the supply is still sufficient for the winter months and there is no need for more unless the weather turns colder. That means there is still some spare supply in the Pacific region.
Reference: Business Standard
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