By ROBERT TUTTLE
The price of liquefied natural gas in Asia is poised to reach
a record in the next several months as the regions
buying surge helps demand capacity grow as much as five times
faster than supply, Bank of America Corp. said.
The power and heating fuel may rise to $20/MMBtu during the
northern hemisphere winter, exceeding Februarys high,
analysts including Shin Kim in New York said in an e-mailed
report Wednesday. Spot prices in Asia climbed to $18.10 in
the week to Nov. 11, according to an assessment by New
York-based World Gas Intelligence.
Natural gas is superchilled into a liquid for transport by
sea and then turned into gas again once delivered. Demand
measured by growth in re-gasification terminals fuel will
rise five times faster than new liquefaction capacity in
2014, having expanded three times quicker this year, the bank
Global LNG markets are heading towards another tight
year, the report said. The underlying problem in
global LNG markets remains with LNG re-gasification capacity
additions far outpacing liquefaction capacity growth.
Costs rose to a record $19.40 on Feb. 4 and have advanced for
the past 10 weeks, WGI data show.
Japan, the worlds biggest LNG importer, will raise its
imports as much as 1 million metric tons to 87 million tons
next year as nuclear generators remain offline, the bank
said. China will boost its annual capacity to receive the
fuel to 38 million tons, three times higher than in 2010, the
Latin American imports, up 16% this year, will be supported
by falling Argentinian gas output and delayed project
s in Brazil, they said.
On the supply side, there is plenty to be concerned
about, the bank said. Most new project
s come on delayed, suffer
from massive cost overruns and struggle with a shortage in
skilled labor or feedgas issues.
Angolas new LNG plant is running below capacity after
starting in the summer, 18 months behind schedule, the bank
said. Algerian exports are down 6% after the new Skikda plant
started in March, it said. Nigerias LNG exports are
being curtailed and Egypts rising demand leaves less
for export, according to Bank of America.
We do not see any material improvements to supply until
2015 when major project
s in Australia, and
eventually the US, start to hit the market, the bank