ISLAMABAD: The Pakistan Economy Watch (PEW) on Tuesday said China has emerged as last hope to stabilise international LNG market as prices have come down by 65 per cent in one year.
China can help disappointed LNG producers by reversing the domestic price hike for natural gas and expedite conversion of power plants on LNG to reduce pollution, said Dr. Murtaza Mughal, President PEW.
He said that demand in China is below the projection at 5.6 per cent due to slower growth but analysts hope that it will climb to double digit in some time. Dr Murtaza Mughal said that China is to meet its target of increasing natural gas use to 400 billion cubic meter annually by 2020 which is a good news for depressed LNG market.
He said that despite the grim scenario the LNG market will flourish to an extent that many countries including Pakistan having troubles like difficult terrain and law and order issues can consider abandoning pipeline projects in favour of LNG transported through ships and trucks. The sharp fall in prices has made LNG viable against pipeline imports from other countries as the situation has changed narrowing price difference.
The oil price collapse has added to the financial problems of Russia which may find it difficult to build some planned pipelines which may help some nine LNG projects in US and Australia and dozens more in other countries, he observed. LNG is gaining foothold in energy markets despite efforts of some oil producing countries but it is not certain that piped natural gas or LNG will emerge as winner in the competition, said D. Mughal.