Liquefied natural gas (LNG) price has been fluctuating in Asia recently. It reveals a downward trend over the past two-three months. The recent price rise is a result of 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 next several years.
There are several factors that affect natural gas demand and price including climate, supply and demand in the oil market, geo-supply, and politics. Geo-supply refers to the routes whereby 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 influenced by the transport infrastructure in the region. The price of LPG in India may also be affected by the political setting in various countries. Natural gas is transported via pipelines in the US and in a number of 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 transport of natural gas becomes easier.
In China, the government is encouraging the growth of domestic production to meet the rising demand for natural gas. The price of LPG is expected to rise as the national production grows. Natural gas supplies around the world will also be affected by the political and geothermic aspects in a variety of countries.
The price of natural gas in Britain is affected by the Rising demand in countries like Ireland, Poland, Malta, Spain, Lesbos, Greece, Norway and others. In Europe, there are plans to construct a liquefied natural gas terminal in order to increase the transport of LPG between countries. There are various proposals for LPG contracts in Europe. The most significant of these is the terminal supplied by E.ON Plc, the world’s biggest producer of LPG.
The price of natural gas can be affected by the weather. For instance, during winter, the demand for heating and cooking is a lot greater than normal. This increased demand triggers the purchase price of LPG to go up, which makes it more expensive than before. Similarly, during summers, the demand for heating is lower than usual. A LPG plant can generate lots of electricity, causing a rise in the purchase price of natural gas delivery.
It should be noted that the price of natural gas in the UK is affected by political events and other outside factors. The purchase price of gas will decrease when the authorities of any nation is taking a major policy decision such as reducing the carbon emission reduction or introducing a new clean energy source. Likewise an increasingly tight supply of oil will decrease the purchase price of natural gas in britain. Natural gas prices have decreased by about 20% in the past couple of years. It’s expected 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’s a domestic commodity. It’s delivered from well sites and entails very low risk. On the other hand, oil has a very large price because it is transported on a massive scale and involves very high risk. It is believed that the purchase price of natural gas will decrease substantially in the next few years.
One of the reasons why natural gases have a low cost is that it comes from a domestic resource. Liquefied natural gas is produced by using a special sort of pressurized water in an energy condenser device. Unlike other kinds of gas, it doesn’t have to undergo any complex processing before it can enter the marketplace. This means that the price of liquefied natural is significantly less than other forms 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 can provide the UK with sufficient energy for about one year. In comparison, oil diesel, which can be used for powering vehicles costs much more. Bio-fuels like vegetable oil can also be utilised as an alternative. Even though it’s a lot more costly 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 present prices are anything to go by, we can expect a price of around $2 per liter in the long run. This may seem like a big fall but compared to other commodity gas prices, it’s actually very profitable. Additionally, it is a green fuel that does not harm the environment.