LNG demand in China and India may rise after prices normalize — OilPrice
At the Gastech conference in Bangkok, Thailand, industry representatives said that demand for liquefied natural gas in China and India could recover after the war in the Middle East ends and prices return to normal levels. OilPrice reports.
High prices curb purchases
According to the outlet, the war in Iran and the closure of the Strait of Hormuz have significantly limited LNG supplies from Qatar and the United Arab Emirates. Producers in the Persian Gulf have found alternative ways to deliver oil: oil is transported in small vessels through the strait and then transferred to other ships near the coast of Oman.
For LNG, such ship-to-ship transfer is considerably more difficult due to the physical and chemical properties of the cargo. According to OilPrice, in recent weeks only individual LNG cargoes may have been able to leave the Strait of Hormuz after being transferred to vessels outside it. These volumes were insufficient to offset the substantial supply losses that have continued since March.
Last week, spot LNG prices in Asia rose to their highest level since 2022. This week, the price of gas for October delivery to Northeast Asia remained above $25 per million British thermal units.
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Importers' assessments
Deepak Gupta, chairman of Indian gas distributor GAIL, said that the sharp rise in gas prices directly affects demand in India, as many sectors of the economy are price-sensitive. “Prices have gone through the roof ... and that definitely affects demand, when it comes to India,” he said.
Luo Yizhou, CEO of PetroChina International, linked the current reduction in purchases in China to high prices. According to him, expensive gas temporarily restrains demand but will not destroy it. He expects consumption to recover when prices return to below $10 per million British thermal units.
Industry representatives at Gastech stressed that the Asian market has significant growth potential, but buyers take into account the cost, reliability and flexibility of supplies.
