High prices choke LNG demand

According to The Express Tribune, LNG demand in China, India and Pakistan could recover from multi-year lows if the Middle East supply shortage eases and new volumes reach the market. Industry executives say that recovery would reverse a shift toward coal and oil that picked up during the US-Iran war.

The conflict has kept Qatar and the UAE from exporting most of their LNG through the Strait of Hormuz, a route that previously carried a fifth of the world's supplies. Shell, the largest LNG trader globally, puts the Middle East shortfall at 36 million tonnes so far this year. Spot LNG rates across Asia have climbed to close to $30 per MMBtu, compared with about $10 before the war.

GAIL chairman Deepak Gupta, speaking at Gastech in Bangkok, said high prices are clearly weighing on Indian demand because many sectors are sensitive to cost. In Pakistan, Pakistan LNG chief executive Masood Nabi expects demand to rise if prices are right once extra volumes come online. He added that solar projects have helped the country cope with power cuts, but other sectors and households still need gas.