According to the Wall Street Journal, the EU is pushing developing countries out of the LNG market
European countries are actively buying liquefied natural gas (LNG) as an alternative to Russian pipeline supplies, leaving poorer countries unable to compete for the fuel due to high prices, The Wall Street Journal reported on Friday.
According to the publication, the price of LNG has risen sharply by 1900% from the minimum of two years ago. Current prices are equivalent to buying oil at $230 a barrel, while LNG typically trades at a discount to oil. Developing countries cannot compete with Europe for supplies at such prices of around $40 per million British thermal units (MMBtu).
According to Wood Mackenzie data cited by the Journal, European countries increased LNG imports by almost 50% from the beginning of the year to June 19. At the same time, India’s imports fell by 16% during the period, and China reduced its purchases. by 21%, in Pakistan by 15%.
Pakistan’s tender to buy about $1 billion worth of LNG on Thursday drew no bids, country officials said. They explained that every day, the country’s businesses and homes suffer from government-imposed blackouts because Islamabad cannot import enough natural gas to power its power plants.
“Every molecule of gas that was available in our region was bought by Europe because they are trying to reduce their dependence on Russia,” Pakistani Energy Minister Musadiq Malik was quoted as saying.
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In some cases, cargoes that were intended for poor countries are diverted to Europe. Experts note that this is beneficial, even if suppliers are forced to pay penalties for contracts with developing countries.
According to Valerie Chow, Wood Mackenzie’s head of gas and LNG research in the Asia-Pacific region, the world’s supply of LNG, which is used for energy production, is being absorbed by European countries. He told the WSJ that “emerging markets in Asia have taken the brunt, with no end in sight.”
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