Liquefied natural gas prices for delivery to Northeast Asia gained this week on forecasts for stronger summer demand amid South Korea’s nuclear stoppages, according to Energy Intelligence Group.
Spot cargoes for delivery of the power-station fuel over the next four to eight weeks rose to $14.60 per million British thermal units from $14.50 per million Btu in the period ended June 3, the research company said on the website of its World Gas Intelligence publication. The price in Southwest Europe was unchanged from last week at $11.55, according to WGI.
Prices for the power-station fuel will increase this week as warmer summer weather in North Asia boosts demand for electricity to run air conditioners, according to three of four traders surveyed by Bloomberg News through June 6.
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, 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.
The country, which depends on nuclear energy for more than 30 percent of its electricity generation, halted the reactors after discovering the facilities were using components with fake quality certificates. 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 LNG, will be looking for additional cargoes as power stations boost thermal electricity generation, according to WGI. The company will probably 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.