Blackout in series in Asia: natural gas costs too much to guarantee service to everyone. Get ready for the European winter
The emerging economies of Asia are facing protracted power crises and continuous blackouts, due to the surge in spot LNG prices and high European demand that is excluding Southeast Asia from the tight global gas market. To experience the price explosion first hand, we show you the liquefied gas prices at the US Henry Hub.
For more than six months, Europe has been the main driver of global demand for liquefied gas, for the fastest possible replacement of gas supplies from Russian pipelines. Since the energy crisis of last autumn, Europe has supplanted Asia as an engine of growth in demand for LNG and is no longer “the market of last resort”, the residual one in case there are no other destinations. This has had very serious repercussions on the energy supplies of the poorest Asian countries.
In Bangladesh, spot LNG purchases ceased in June and the country is looking for long-term supplies, State Minister for Energy and Mineral Resources Nasrul Hamid told Bloomberg in a published interview. Monday. However, long-term suppliers such as Qatar have reported that they will have volumes of LNG available on forward contracts, but only after 2026, the minister added.
The energy crisis in Pakistan is also deepening, due to the high prices of energy imports and the unavailability of further supplies of LNG . Failing to get its hands on volumes of exorbitantly expensive spot gas, Pakistan has increased imports of fuel oil for use in power generation. However, this will not be enough to cover the energy deficit and Pakistan continues to suffer blackouts during heat waves.
In Southeast Asia, Sri Lanka's blackouts and deep economic crisis led to protests that ousted the president after the country couldn't afford to import food and fuel.
Europe is also preparing for this winter's blackouts. Greek Minister of Environment and Energy, Kostas Skrekas, warned on Monday that families could face chain blackouts after the summer if Russia cuts off gas supplies to Europe in the coming weeks or months and if 'EU will want to achieve 15% reduction in gas consumption. Before families are affected, Greece will turn off the spotlight on landmarks and use less street lighting.
"We all need to understand that we cannot act as if nothing is happening around us," the minister told the Greek daily Kathimerini. "There is a war that is destroying a country and is also fueling an energy crisis never seen before … we must all realize that we cannot waste energy," added Skrekas.
Thanks to our Telegram channel you can stay updated on the publication of new articles of Economic Scenarios.
The article Blackout in series in Asia: natural gas costs too much to guarantee service to everyone. Get ready for the European winter comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/blackout-in-serie-in-asia-il-gas-naturale-costa-troppo-per-garantire-il-servizio-a-tutti-preparatevi-allinverno-europeo/ on Mon, 01 Aug 2022 16:52:47 +0000.