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 rising demand in China and other Asian countries like the Philippines, Vietnam, and Indonesia. Over consumption in these countries is expected to double in the next several years.
There are several factors that affect natural gas demand and cost including climate, supply and demand in the oil market, geo-supply, and politics. Geo-supply refers to the paths through which natural gas is transported; there are two main routes through which natural gas is delivered in the world, the trans-boundary paths and the inland routes. The high cost of LPG in India is due to the high amount of consumption in China.
The price of LPG in Indonesia is affected by the transportation infrastructure in the area. The purchase price of LPG in India may also be influenced by the political setting in various countries. Natural gas is transported through pipelines in the US and in several 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 transfer of natural gas becomes easier.
In China, the government is encouraging the development of domestic production to satisfy the rising demand for natural gas. The price of LPG is expected to rise as the national production grows. Natural gas supplies around the world will also be affected by the political and geothermic aspects in a variety of countries.
The price of natural gas in the UK is Influenced by the Rising demand in countries like Ireland, Poland, Malta, Spain, Lesbos, Greece, Norway and Many Others. In Europe, there are plans to construct a liquefied natural gas terminal so as to improve the transfer of LPG between nations. There are many suggestions for LPG contracts in Europe. The most significant of these is the terminal provided by E.ON Plc, the world’s biggest producer of LPG.
The price of natural gas can be affected by the weather. As an example, during winter, the demand for cooking and heating is much greater than normal. This increased demand triggers the purchase price of LPG to go up, making it more costly than before. Similarly, during summers, the demand for heating is lower than normal. A LPG plant can generate a large amount of electricity, causing a rise in the price of natural gas delivery.
It should 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. Likewise an increasingly tight supply of oil will decrease the price of natural gas in britain. Natural gas prices have decreased by about 20% in the last few years. It is expected that this trend will continue for the next few years.
Natural gas has a very low cost compared to other fossil fuels, mainly because it is a domestic commodity. It’s delivered from well sites and entails very low risk. On the other hand, oil has a very large price because it is transported on a massive scale and involves very high risk. It’s believed that the price of natural gas will decrease substantially in the next few years.
One reason why natural gases have a low price is that it comes from a national resource. Liquefied natural gas is generated using a special sort of pressurized water in a power condenser device. Unlike other kinds of gas, it does not need to undergo any complicated processing before it can enter the market. This means that the price of liquefied natural is significantly less than other forms 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 can provide the UK with enough energy for about 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 is much 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 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 big drop but in contrast to other commodity gas prices, it’s truly very profitable. Additionally, it is a green fuel that does not damage the environment.