News wire — Spot LNG prices have nearly tripled since early November as freezing temperatures across North Asia boosted demand and depleted inventories. Since July, prices are up a dizzying 1,000%.
Pakistan and Bangladesh are rationing gas and buyers across South Asia are seeking alternative fuels after spot liquefied natural gas, LNG, prices surged to record highs, government and industry officials told Reuters.
Gas-fired power plants and industries across the region are scrimping on gas, with the scramble for other fuels driving up demand for liquefied petroleum gas, LPG, and residue oil.
In Pakistan, which is more reliant on spot LNG imports for its winter needs, gas use for industry is being limited to certain hours and industry executives have warned the situation has become critical.
A recent power blackout was partly caused by a gas shortage after buyers who snapped up record-cheap LNG earlier in the year balked at paying up during the recent price surge.
“The current gas crisis being faced by the industry includes disconnection of gas supply to industries as well as low gas pressure,” said Saleem Uz Zaman, president of the Trade and Industry Association of Karachi.
Sui Southern Gas Company, the gas distributor for the southern half of Pakistan, said in a letter to industry associations that it faces an “emergency situation” and pegged the daily supply gap at about 200 million cubic feet.
In Bangladesh, the government has cut gas supplies to power plants due to lower electricity demand during winter, while maintaining steady gas flows to industries, a senior official at the state-run Petrobangla said.
Soaring prices have led to cancelled orders from state-owned buyers Indian Oil Corp, Pakistan LNG and Bangladesh’s Rupantarita Prakritik Gas Co.