Liquefied natural gas (LNG) price has been fluctuating in Asia recently. It reveals a downward trend over the past two-three months. The recent price rise is a result of the increasing demand in China and other Asian countries such as the Philippines, Vietnam, and Indonesia. Over consumption in these countries is expected to double in the coming years.
There are several factors that affect natural gas demand and price such as climate, supply and demand in the oil market, geo-supply, and politics. Geo-supply refers to the routes whereby natural gas is transported; there are two major routes through which natural gas is delivered in the world, the trans-boundary routes and the inland routes. The high price of LPG in India is because of the high amount of consumption in China.
The price of LPG in Indonesia is affected by the transport infrastructure in the region. The purchase price of LPG in India can also be affected by the political atmosphere in various countries. Natural gas is transported through pipelines in the US and in a number of countries in Europe. The price of LPG also depends upon the transit time. In Asia, the transportation infrastructure is undergoing renovation and new pipelines are built so that the transfer of natural gas gets easier.
In China, the government is encouraging the development of domestic production to meet the rising demand for natural gas. The price of LPG is expected to rise as the national production grows. Natural gas supplies around the globe will also be affected by the political and geothermic aspects in a variety of countries.
The Cost of natural gas in the UK is Influenced by the increasing demand in countries like Ireland, Poland, Malta, Spain, Lesbos, Greece, Norway and others. In Europe, there are plans to build a liquefied natural gas terminal so as to improve the transfer of LPG between countries. There are various proposals for LPG contracts in Europe. The most important of these is the terminal supplied by E.ON Plc, the world’s biggest producer of LPG.
The purchase price of natural gas may be impacted by the weather. For instance, during winter, the demand for heating and cooking is much greater than normal. This increased demand triggers the price of LPG to go up, which makes it more expensive than before. Similarly, during summers, the demand for heating is lower than usual. A LPG plant can create lots of electricity, causing an increase in the purchase price of natural gas delivery.
It must be noted that the purchase price of natural gas in the UK is affected by political events and other outside factors. The purchase price of gas will decrease when the government of any country is taking a significant policy decision such as reducing the carbon emission reduction or introducing a new clean energy source. Similarly, an increasingly tight supply of oil will decrease the purchase price of natural gas in the UK. Natural gas costs have decreased by about 20% in the last few years. It is anticipated that this trend will continue for the coming years.
Natural gas has a very low cost compared to other fossil fuels, mainly because it’s a domestic commodity. It’s delivered from well sites and involves very low risk. On the other hand, oil has a very high price because it is transported on a massive scale and involves very high risk. It’s believed that the purchase price of natural gas will decrease substantially in the coming years.
One reason why natural gases have a low price is that it comes from a national resource. Liquefied natural gas is produced using a special sort of pressurized water in a power condenser device. Unlike other forms of gas, it does not need to undergo any complex processing before it can enter the market. This means that the purchase price of liquefied natural is significantly less than other kinds of natural gas.
Another reason why liquified natural gas has a low price is that it’s a highly efficient fuel. A barrel of natural gas may supply the UK with sufficient energy for around one year. In contrast, petroleum diesel, which is used for powering vehicles costs more. Bio-fuels like vegetable oil can also be utilised as an alternative. Although it is a lot more costly than gas from mines, it’s a cleaner fuel.
It can be assumed that future costs of liquefied natural gas will follow similar trends as other fossil fuels. If current prices are anything to go by, we can expect a price of around $2 per liter in the long run. This may sound like a huge fall but compared to other commodity gas prices, it is actually very profitable. In addition, it is a green fuel which does not damage the environment.