Liquefied natural gas prices for delivery to Northeast Asia gained this week after South Korea shut three nuclear reactors, according to Energy Intelligence Group.
Spot cargoes for delivery of the power-station fuel over the next four to eight weeks rose to $14.50 per million British thermal units from $14.30 per million Btu in the period ended May 27, the research company said on the website of its World Gas Intelligence publication. The price in Southwest Europe increased to $11.55 from $11.50 last week, according to WGI.
South Korea, the world’s fourth-biggest producer of nuclear power last year, is struggling to meet its summer electricity needs as the shutdown of two reactors last week and delays to the resumption of a third cuts supplies amid rising demand for air conditioning. Asian LNG buyers typically pay more in the months before and during the northern-hemisphere summer from June through August as electricity consumption increases.
South Korea, which depends on nuclear energy for more than 30 percent of its electricity generation, halted the reactors after discovering the facilities were using components whose quality certificates were faked. The nation may face “unprecedented” power shortages, Vice Minister for Energy Han Jin Hyun said May 28.
Korea Gas Corp., the world’s largest buyer of the fuel, will be looking for additional LNG cargoes as power stations boost thermal electricity generation, according to WGI. The company is likely to turn to term suppliers initially rather than the spot market for more shipments, it said.
Korea Gas, known as Kogas, will discuss LNG volumes with its long-term suppliers, a company official said June 3, asking not to be identified because he isn’t authorized to speak to the media. The impact of the nuclear outages is being monitored and South Korea’s government is enforcing power-saving measures, the official said.