Europe and Asia compete for rising liquefied gas price

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The experts of the energy market observe the contest between Europe and Asia for rising liquefied gas prices. According to statistical data, the supplies of the resource beat all records nowadays.

The prices for LPG continue growing. As of May 1, the cost of gas has exceeded 270 US dollars for 1,000 cubic meters at the most liquid European TTF stock exchange, the EADaily informs.

Traditionally, the fuel cost reduces after the winter and heating season, however, this time, Europe has consumed record-breaking 76 billion cubic meters and the season of pumping gas to storages has been delayed by almost one month due to cold weather.

European traders are not even happy with record-breaking supplies of the LNG. They need more gas, the same as Asian consumers. It caused the competition over the LNG between Europe and Asia.

It depends of prices who will win and who will be supplied with the LNG in the first term. In Asia, the gas prices have been reaching 314 US dollars including the shipment cost at the spot market in June. According to Nasdaq agency, the difference between Asian and European prices have to be not less than 35 dollars for 1,000 cubic meters for the suppliers to be more beneficial to deliver gas to Asia. At this moment, this difference is preserved.

At the same time, the freight cost of the LNG carriers is also growing. Thus, it was increased from 50,000 – 65,000 US dollars to 70,000 – 80,000 US dollars per day in the period from April 26 to May 2. The experts think that suppliers of pipeline gas, in this case this is Russian Gazprom, will benefit in this situation. According to initial date, the export of Russian gas giant to distant foreign countries has been increased by 28.3 percent for four months of 2021 comparing with the same period of 2020. At this moment, the company s not going to increase the export volumes. According to Deputy Board Chairman of Gazprom Elena Burmistrova, favorable situation is formed up today, underground storages in Europe are empty after cold winter and it gives certain hopes.

Therefore, at present time, Gazprom fulfil contractual obligations and does not place addition volumes to the market in order not to cause fall of the prices.

These news gives optimism to Central Asian gas producers – Turkmenistan, Kazakhstan and Uzbekistan, which sell their gas to Russia. Earlier, mass media informed that Russian gas giant plans to increase procurement of Central Asian natural gas.