In January the UK received seven LNG cargoes, compared to just one cargo in the same month last year, analysts at market reporting agency Icis said.
Icis’ head of Global LNG Ed Cox told Utility Week that in Asia, LNG prices have fallen below that of the UK for the first time since the Fukushima nuclear disaster forced Japan into an increased dependency on gas-fired power.
Since 2010 strong demand from Asian markets – including Japan, South Korea, Taiwan and China – has put in place a strong price premium over the UK, meaning it is difficult to attract cargoes in the competitive global market.
But on Wednesday the price for LNG delivered to Asia in March closed at 45.63 pence/therm while the UK price closed at 46.08 pence/therm.
“A combination of weak winter gas demand across key importing Asian countries, additional global production and lower oil prices have hit market sentiment with spot prices falling fast,” Cox said.
As a result, the UK has seen LNG imports climb to account for around 25 per cent of the UK’s total gas supply between October and February. The remainder is made up from Norwegian pipeline gas imports and from domestic production.
Although UK gas prices for next-month delivery are currently 30 per cent lower than at the same time last year Cox said forward pricing trends suggest the UK may continue to be a more attractive market for LNG exporters “for the foreseeable future”.