Competition for LNG supplies in the world has intensified after Gazprom announced a reduction in gas pumping to Europe through the Nord Stream pipeline, Bloomberg reports.
Energy companies in South Korea and Japan are accelerating winter LNG purchases amid concerns that Europe will start to actively replenish supplies with liquefied gas supplies, informed traders told the agency. That said, even countries that have a hard time accepting changes in commodity prices, like India and Thailand, are increasing purchases to avoid shortages.
On July 25, Gazprom announced that gas pumping through Nord Stream would be reduced to 1/5 of its capacity from July 27 .
Traders estimate that LNG spot prices in North Asia could hit $45 per million British thermal units (BTU) on Tuesday, the highest since early March.
Natural gas is one of the key energy sources in power generation and space heating. The rise in gas prices will lead to an even greater acceleration of inflation in the world. At the current price level, buyers from emerging economies like Pakistan, Bangladesh and Argentina cannot afford to transact in the spot markets, causing gas shortages, Bloomberg notes.