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 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 paths through which natural gas is transported; there are two major routes through which natural gas is delivered in the Earth, 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 purchase price of LPG in Indonesia is affected by the transport infrastructure in the region. The purchase price of LPG in India can also be influenced 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 transportation infrastructure is undergoing renovation and new pipelines have been built so the transport of natural gas becomes easier.
In China, the government is encouraging the development of domestic production to meet the rising demand for natural gas. The purchase 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 aspects in a variety of countries.
The Cost of natural gas in Britain is Influenced by the Rising 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 nations. There are many 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 price of natural gas may be impacted by the weather. For instance, during winter, the demand for cooking and heating is much greater than normal. This increased demand triggers the price of LPG to go up, making it more costly than before. Similarly, during summers, the demand for heating is lower than usual. A LPG plant can generate lots of electricity, causing an increase in the purchase 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 outside factors. The price of gas will decrease when the government of any country 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 prices 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 cost compared to other fossil fuels, mainly because it is a domestic commodity. It is delivered from well sites and involves 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’s believed that the purchase 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 domestic resource. Liquefied natural gas is produced by 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 kinds of natural gas.
Another reason why liquified natural gas has a low cost is that it is a highly efficient fuel. A barrel of natural gas may provide the UK with enough energy for around one year. In contrast, petroleum diesel, which can be used for powering vehicles costs much more. Bio-fuels like vegetable oil can also be used alternatively. Even though it is much more expensive 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 cost of around $2 per liter in the long run. This may sound like a huge drop but in contrast to other commodity gas prices, it’s actually very profitable. In addition, it’s a green fuel that does not harm the environment.