ENTSOG GRIP SC 2017 - 2026 / Main Report

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Southern Corridor GRIP 2017–2026 | 57
Cove Point 10.08
Canaport 10.27 Belgium 15.23
Spain 17.76
Korea 17.50
India 17.40
Lake Charles 9.71
Japan 17.50
Rio de Janeiro 16.53
Altamira 16.38
China 17.03
Bahia Blanca 16.97
UK 14.92
Spot Price in €/MWh
(original data in $/MMBtu)
Figure 4.11: Estimated World LNG spot prices5)
Focusing the scope toward LNG, a general alignment trend toward a reference value
of 14€/MWh was clearly evident in the first part of 2016. Only US gas market was
benefitting from considerably lower cost conditions (between 5 and 6 €/MWh),
confirming the persistent abundance of natural gas followed shale gas revolution
and providing room for US producers to gain from export dynamics. However, as
shown in Figure 4.11 for estimation referred to May 2017, LNG prices marked an
increase, from the second half of 2016 and into 2017, driving Asian prices at
17 €/MWh, European prices at 15 €/MWh and US prices substantially lower at
around 10€/MWh. This increase was the result of both the increase of oil prices and
the strong demand in Asia, mainly in India and China. It is expected though that the
gradual start-up of nuclear reactors in Japan and the exports from USA will have a
stabilising effect on prices.
The change, from the year of the previous SC GRIP publication, is particularly
relevant since at the end of 2013 LNG prices were estimated to be around 38€/MWh
in Japan, value 50% higher than in Europe (around 25 €/MWh), which in turn
experienced price levels three times higher than in the east coast of the USA (around
8€/MWh). Regional differences have since been greatly reduced as indicated by the
ratio between Japan and USA prices which has fallen, since the publication of the
last SC GRIP, from around 12 to less than 2.5)
5) Source: Waterborne Energy, Inc. Monthly average of the weekly landed prices for the listed month. Landed prices are
based on a netback calculation (Data in euro/MWh, converted from USD/Mbtu with the following rates: USD=0,9091 €;
Mbtu=0,293071083 Mwh) – Federal Energy Regulatory Commission • Market Oversight •