Liquefied natural gas (LNG) price has been fluctuating in Asia recently. It shows a downward trend over the last two-three months. The recent price rise is due to 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 next several years.
There are lots of factors that influence 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 Earth, 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 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 on the transit time. In Asia, the transport infrastructure is undergoing renovation and new pipelines have been built so the transfer of natural gas becomes easier.
In China, the government is encouraging the growth of domestic production to meet the rising demand for natural gas. The price of LPG is expected to rise as the domestic production grows. Natural gas supplies around the world will also be affected by the political and geothermic factors in various 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 build a liquefied natural gas terminal in order to increase the transport of LPG between countries. There are various proposals for LPG contracts in Europe. The most significant of these is the terminal supplied by E.ON Plc, the world’s largest producer of LPG.
The purchase price of natural gas can be affected by the weather. For instance, during winter, the demand for heating and cooking is much greater than normal. This higher demand triggers the price of LPG to go up, making it more expensive than before. Similarly, during summers, the demand for heating is lower than usual. A LPG plant can generate a large amount of electricity, causing a rise in the price of natural gas delivery.
It must be noted that the price of natural gas in the UK is influenced by political events and other external factors. The price of gas will decrease when the government of any nation is taking a significant policy decision such as reducing the carbon dioxide reduction or introducing a new clean energy source. Similarly, an increasingly tight supply of oil will reduce the price of natural gas in the UK. Natural gas costs have decreased by about 20 percent 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 cost 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’s transported on a massive scale and involves very high risk. It is believed that the price of natural gas will decrease substantially in the next few years.
One of the reasons why natural gases have a low cost is that it comes from a domestic resource. Liquefied natural gas is produced by using a special type 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 purchase price of liquefied natural is significantly less than other kinds of natural gas.
Another reason why liquified natural gas has a low cost is that it is an extremely efficient fuel. A barrel of natural gas may supply the UK with enough energy for around one year. In comparison, oil diesel, which can be used for powering vehicles costs much more. Bio-fuels like vegetable oil can also be utilised alternatively. Even though it is much more expensive than gas from mines, it’s 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 huge drop but in contrast to other commodity gas costs, it is truly very profitable. Additionally, it is a green fuel that does not harm the environment.