Liquefied natural gas (LNG) price has been fluctuating in Asia recently. It shows 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 like 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 paths and the inland routes. The high price of LPG in India is due to the high quantity of consumption in China.
The purchase price of LPG in Indonesia is influenced by the transport infrastructure in the area. The price of LPG in India can also be influenced by the political setting in various countries. Natural gas is transported through pipelines in the US and in a number of countries in Europe. The purchase price of LPG also depends on the transit time. In Asia, the transportation infrastructure is undergoing renovation and new pipelines are built so the transport 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 affected by the Rising demand in countries like Ireland, Poland, Malta, Spain, Lesbos, Greece, Norway and Many Others. In Europe, there are plans to build a liquefied natural gas terminal in order to improve the transfer of LPG between nations. There are many suggestions for LPG contracts in Europe. The most important of them is the terminal provided by E.ON Plc, the world’s biggest producer of LPG.
The price of natural gas may be impacted by the weather. As an example, during winter, the demand for heating and cooking is much greater than normal. This higher demand triggers the purchase price of LPG to go up, which makes it more expensive than before. Similarly, during summers, the demand for heating is lower than normal. A LPG plant can generate lots of electricity, causing an increase in the price of natural gas delivery.
It should be noted that the purchase price of natural gas in the UK is influenced by political events and other outside factors. The price of gas will decrease when the authorities of any nation is taking a major policy decision such as reducing the carbon dioxide reduction or introducing a new clean energy source. Likewise an increasingly tight supply of oil will decrease the purchase price of natural gas in Britain. Natural gas costs have decreased by about 20% in the past couple of years. It is anticipated that this trend will continue for the next few years.
Natural gas has a very low price compared to other fossil fuels, mainly because it’s a domestic commodity. It is delivered from well sites and entails very low risk. On the other hand, oil has a very high price because it is transported on a large scale and involves very high risk. It is believed that the purchase price of natural gas will decrease substantially in the coming years.
One of the reasons why natural gases have a very low price is that it comes from a national resource. Liquefied natural gas is produced using a special type of pressurized water in a power condenser device. Unlike other kinds of gas, it does not have to undergo any complex processing before it can enter the market. This means that the 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 an extremely efficient fuel. A barrel of natural gas can supply the UK with enough energy for around one year. In comparison, petroleum diesel, which is used for powering vehicles costs much more. Bio-fuels like vegetable oil can also be used as an alternative. Even though it’s a lot more costly than gas from mines, it is a cleaner fuel.
It can be assumed that future prices of liquefied natural gas will follow similar trends as other fossil fuels. If present 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 big drop but in contrast to other commodity gas prices, it’s actually very profitable. Additionally, it’s a green fuel which does not harm the environment.