India recorded its highest-ever import levels in May at 2.4 million tonnes
London – Extreme temperatures across Asia are increasing demand for liquefied natural gas in the region: this is the main explanation for very strong increase in imports, which have already reached record levels.
This phenomenon, according to analysts, could restrict available supply and further increase Asian spot prices which have already increased by a third since April, with heat waves in South and Southeast Asia encouraging the use of air conditioners and other cooling techniques. Prices are now at a nearly six-month high, at $12 per million British thermal units (mmBtu)and are expected to remain very high.
“Spot prices are driven by Asian demand. Temperatures in South Asia are rising due to a heat wave, which increases energy demand,” he told the trade press. Siamak Adibi, of the energy consultancy company Fge.
“While the China expected to see lower demand than 2021’s record shipments, demand from India and the rest of Asia has more than offset any decline,” Adibi said.
Parts of South and Southeast Asia saw extreme heat and record temperatures in April and May, boosting electricity consumption and straining electricity supplies. In India dozens of people died for suspected heatstroke in the eastern states of Bihar and Odisha.
According to analytics firm Kpler, South Asian gas imports rose nearly 20% from a year earlier, reaching 3.8 million tonnes in May. India recorded its highest-ever import levels in May at 2.4 million tonnes, while Bangladeshi gas volumes hit an all-time monthly record of 0.6 million tons.
New importers Philippines and Vietnam, which began receiving gas shipments last year, have also increased their purchases. Vietnam received three cargoes in April and May for power generation, while the Philippines has received nine cargoes so far this year against 11 for the whole of last year.
The growing demand for cooling is set to continue. The Japan Meteorological Agency predicts above-average temperatures from June to August, and China’s energy regulator has warned that energy supplies will be limited in some regions in the coming months due to increasing consumption.
Japanese government data showed gas stocks by utilities stood at 2.06 million tons as of May 26, below the five-year average for the period.
