LNG markets shifting, prices likely to remain low: Barker

LNG markets are shifting especially in East, South-East and South Asia where gas is relatively plentiful and there are many new fields being discovered and developed around the world, says an economist.
Institute of National Affairs director Paul Barker said in any case, the price for LNG was likely to remain relatively low in a competitive energy market.
“But which is critical to LNG superseding coal as the preferred intermediate source for much of the region’s electricity generation, where renewables are not readily available,” he said.
“East Asia has long been heavily dependent upon coal, notably for its low price and ready accessibility in the region.
“But with concerns over emissions and climate, and the progressively lower prices of LNG and renewables, the shift out of coal is picking up pace, particularly as old power plants reach the end of their lives, but also in the face of the major increase in energy demand, outside the unusual conditions of 2020.”
He said LNG prices were largely linked to oil (notably Brent crude), but had become increasingly independent, with greater use of spot pricing and shift to regional bench-making for the futures market.
“The sustained shift to lower LNG prices, which have been further reinforced during 2020, with the relative energy supply surplus, and fall in demand associated with the pandemic, and some countries’ inclination to use this opportunity to shift to cleaner energy sources, and opening up energy markets to greater competition (as in India), are seeing optimistic forecasts for LNG demand growth, particularly in the East, South East and South energy markets, notably as a transition energy source, between coal and renewables (albeit concerns over methane component in LNG).”