India, China LNG demand down, but not out
India and China's liquefied natural gas (LNG) demand is projected to rise once the Middle East supply shortage subsides and prices decrease, according to a Reuters report. The conflict between the United States and Iran has driven Asian buyers towards more affordable options like coal and oil. The disruption in LNG supply from Qatar and the United Arab Emirates, through the Strait of Hormuz, has led to spot LNG prices reaching near $30 per million British thermal units (MMBtu), up from around $10 per MMBtu prior to the war.
GAIL Chairman Deepak Gupta and PetroChina International CEO Luo Yizhou both testified at the Gastech conference in Bangkok, stating that the current demand slowdown is likely to be temporary. India's LNG demand is particularly impacted due to its price sensitivity across various sectors. GAIL had to limit gas consumption initially, but has since restored supplies to about 90-95% by sourcing LNG from alternative markets.
Both GAIL and PetroChina have dispatched trading teams to secure replacement cargoes. The supply disruption has also affected the global LNG market, with Shell's President for Integrated Gas Cederic Cremers reporting a loss of 36 million tonnes of LNG from the Middle East so far this year. Industry executives anticipate that new LNG production will begin in the next few years, potentially bringing prices down and supporting demand.
China is also experiencing weaker LNG demand as high prices make the fuel less appealing for power generation. PetroChina expects Chinese demand to recover once LNG prices return to around $7-$9 per MMBtu, citing China's ongoing growth in electricity consumption.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
