Numbers tell the evolving LNG story

In spite of challenges, the Asian market for LNG continues to remain bullish and many of the numbers behind the story were rolled out at EMART Asia by Hong Chou Hui, Platts Managing Editor for Asia LNG.

One-third of LNG imports in the region in 2011 were into Japan--as the post-Fukushima energy realities took their grip--and accounted for a record high intake of 78.5 million tonnes. South Korea accounted for 15.2 percent of the region's LNG imports. Taiwan's economic recovery of 10 percent GDP growth also increased industrial demand for LNG substantially.

Domestic gas production in India took a hit as gas supplies dwindled. This led to greater demand for LNG to cover the shortfall in natural gas supplies during 2011. A three-week domestic gas pipeline outage in Thailand also disrupted the supply of natural gas and Thailand was forced to import more spot LNG.

Unpredictable weather in North Asia has impacted pricing this year; with a warmer start to the winter than anticipated. Japan and South Korea found themselves with excess LNG supply. These higher levels of LNG inventory left Japan and South Korea out of the market and led to the fall of prices during the coldest months of early 2012.

Furthermore, prices rose in the spring of 2012, the period when LNG prices typically fall. This was due to the pre-emptive purchase of LNG by Japan for the summer, following the unusually hot summer of 2011.

A key issue to be resolved for the LNG market going forward is the nuclear question. As corporations and businesses pressure the Japanese government to restart nuclear power plants to supply the baseload demand, the implications for the LNG market will be significant.

By :Ang Soo Hern, EMA