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Gas Regional Investment Plan of the South Region 2017
5.3 Prices
5.3.1 EVOLUTION OF SPOT LNG PRICES IN EUROPE
AND ASIA
As it has been described in TYNDP 2017, Supply chapter, LNG enables the
connection of Europe to the global market and a large number of producing countries
in the Middle East, the Atlantic (including the Mediterranean) and the Pacific basins.
It gives access to reliable and diversified supply offering the shippers arbitrage
opportunities at a global scale between different sources and regional markets.
In order to show the evolution of spot LNG prices in the different import basins, we
have analysed the behavior of Europe, Asia and South America import LNG prices.
Main facts:
\\
Divergence of prices between Asian and European LNG markets was
considerably high during 2014. For this reason, re-export of LNG vessels
increased during this period reaching the maximum amount of LNG re-exported
from Europe.
\\
Since the beginning of 2015 a higher convergence of prices between LNG
markets was achieved and in general terms, LNG prices went down. This fact
is related to a combination of global LNG oversupply at production basins, with
low gas overall demand.
\\
The convergence of LNG prices continued in 2016. The positive trend in prices
of all LNG markets during 2016 is driven by a combination of factors: higher
LNG demand, higher Brent prices and some problems in LNG production.
\\
The spread between prices from Asian and European LNG markets has
increased progressively in the last quarter of 2016 due to several elements like
higher demand and unavailability of some of the LNG production facilities.
Figure 5.5:
Main LNG importing areas (Source: TSO own elaboration)
South America
Europe
Asia