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Asian LNG market faces price volatility risks, warns Wood Mackenzie VP
Mangesh Dilip Patankar, Vice President, APAC Gas and LNG Consulting at Wood Mackenzie, has cautioned that the Asian liquefied natural gas (LNG) market is delicately balanced, and any disruptions in supply or increases in demand could lead to significant price fluctuations. Patankar made these remarks during the Gastech 2023 conference in Singapore, highlighting the uncertainty in the LNG market, which has impacted pricing and contract terms and created a gap between buyer and seller expectations.
Many LNG buyers in Asia are facing the challenge of ensuring a secure supply of LNG while keeping procurement costs competitive and contract terms flexible. Simultaneously, LNG sale and purchase agreements (SPAs) are evolving as LNG trading grows. According to Wood Mackenzie Lens, Australia and Qatar are expected to be the largest LNG suppliers to Asia from 2023 to 2030, accounting for nearly 60 per cent of the total LNG delivered to Asia during this period.
Asia’s LNG interest
Patankar believes that the LNG market, which has cooled off from its peak in the previous year, is now attracting interest from emerging buyers in Asia. However, he advises that these buyers must understand the complex fundamentals of LNG and monitor its price volatility closely.
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