Liquefied natural gas (LNG) price has been fluctuating in Asia recently. It reveals a downward trend over the last two-three months. The recent price rise is due to the rising 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 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 whereby natural gas is transported; there are two major routes through which natural gas is delivered in the world, the trans-boundary routes 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 influenced by the transportation infrastructure in the area. The purchase price of LPG in India may also be affected by the political atmosphere in different countries. Natural gas is transported through pipelines in the US and in several countries in Europe. The price of LPG also depends upon the transit time. In Asia, the transport infrastructure is undergoing renovation and new pipelines are built so that 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 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 factors in a variety of countries.
The Cost of natural gas in the UK 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 in order to increase the transfer of LPG between countries. There are various suggestions for LPG contracts in Europe. The most significant of them is the terminal supplied by E.ON Plc, the world’s largest producer of LPG.
The purchase price of natural gas may be impacted by the weather. For instance, during winter, the demand for heating and cooking is a lot greater than normal. This higher demand triggers the purchase price of LPG to go up, making it more expensive than before. Similarly, during summers, the demand for heating is lower than normal. A LPG plant can create a large amount of electricity, causing an increase in the price of natural gas delivery.
It must be noted that the purchase price of natural gas in the UK is influenced by political events and other external factors. The purchase price of gas will decrease when the authorities of any nation is taking a significant 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 the UK. Natural gas costs have decreased by about 20% in the last 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’s 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’s believed that the purchase price of natural gas will decrease substantially in the coming years.
One of the reasons why natural gases have a low price is that it comes from a national resource. Liquefied natural gas is generated by using a special type of pressurized water in a power condenser device. Unlike other forms of gas, it doesn’t need to undergo any complex 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 a highly efficient fuel. A barrel of natural gas may provide the UK with enough energy for around one year. In comparison, petroleum diesel, which can be used for powering vehicles costs much more. Bio-fuels like vegetable oil can also be used alternatively. Although it is a lot more expensive than gas from mines, it is a cleaner fuel.
It can be assumed that future costs of liquefied natural gas will follow similar trends as other fossil fuels. If current prices are anything to go by, we can expect a cost of around $2 per liter in the future. This may seem like a big drop but in contrast to other commodity gas costs, it’s truly very profitable. In addition, it’s a green fuel that does not damage the environment.