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Global LNG prices to keep rising into 2025: Natural gas prices in Asia, Europe and North America increased between 30-50% in 2024 and will continue to rise in key consumer hubs into the new year, Reuters reported last week. Cold weather will continue to trigger higher demand for heating, and countries are also actively and quickly restocking their declining gas supplies in Europe and Asia, further boosting demand even if temperatures turn mild again, according to the newswire. This ensures that the market sentiment will remain bullish until the end of winter.
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Why is this important? Rapidly rising gas prices could also raise the likelihood of having to use coal-fired power plants as they are cheaper to run in China, South Korea, and other parts of Asia and generate more emissions per unit of power output.
ICYMI- Asian LNG prices could jump USD 20 per mn British thermal units (mmBtu) if European gas supply narrows this winter, Goldman Sachs analysts told Reuters last month. There is also a possibility of delays in LNG supply projects across the US, which would decrease European and Asian access to LNG next year.
Competitiveness is at risk state-side: The rising costs of building and equipping new LNG plants in the US will reduce the country’s competitiveness in gas exports, Reuters reported last week, citing LNG analysts at Poten & Partners’ predictions.
Natgas prices could reach USD 6 per mn standard cubic feet due to increased demand from LNG export plants, according to the newswire. The increased prices are also due to a possible 20% growth in electricity usage as well as the need for investments in the infrastructure of US projects, Poten & Partners’ business intelligence chief Jason Feer told Reuters.
Over budget: Venture Global’s Plaquemines export plant has gone over budget in its construction costs by USD 2.3 mn, and Golden Pass LNG, a JV between Exxon Mobil and QatarEnergy, has gone at least USD 2 mn over its budget.
REMEMBER- US federal regulators extended ExxonMobil and Qatar Energy’s LNG joint venture for three years to finish building their Golden Pass LNG last October. The extension was granted due to delays when lead construction contractor Zachry Holdings filed for bankruptcy in March.
