LNG May Battle Oil for Buyers This WinterBy
A shrinking discount for liquefied natural gas versus oil will stoke competition for buyers in some markets heading into the winter heating season, said Madeline Jowdy, senior director of global gas and LNG at Pira Energy Group in New York. WGI Northeast Asia Spot LNG, a regional benchmark, was recently assessed at $9.20 per million British thermal units, $1.37 less than what December Brent would cost Friday on an mmbtu basis. The spread was more than $3 in June. “When LNG reaches or surpasses oil parity, it means that some more price sensitive utilities or industrial users will switch to oil,” India is one example of where industrial users would switch. Japanese and Korean utilities may follow if the narrow discount holds, she said.