SINGAPORE, May 31 (Reuters) - Extreme temperatures
across Asia are driving up liquefied natural gas (LNG) demand in
the region as importers seek cargoes ahead of summer, with
imports in South Asia hitting records.
This could tighten available supply and further lift Asian
spot prices that have already gained a third since
April, with heatwaves across South and Southeast Asia boosting
air-conditioner use and other cooling demand. Prices are now at
a near six-month peak above $12 per million British thermal
units (mmBtu) and are expected to remain elevated.
"Spot prices are now driven by Asian demand. Temperatures in
South Asia are rising due to a heatwave, increasing power
demand," said Siamak Adibi, principal consultant at energy
consultancy FGE.
While China may still see lower demand compared with its
record breaking shipments in 2021, demand from India and the
rest of Asia has compensated for any drop-off, Adibi said.
Parts of South and Southeast Asia saw extreme heat and
record temperatures in April and May, increasing electricity
consumption for cooling and straining power supplies. In India
on Thursday, at least 15 people died of suspected heatstroke in
the eastern states of Bihar and Odisha.
South Asian LNG imports rose nearly 20% from a year
earlier to 3.8 million metric tons in May, according to
analytics firm Kpler. India saw its highest import levels ever
for May at 2.4 million tons, while Bangladesh LNG volumes hit an
all-time monthly record at 0.6 million tons, according to Kpler
data.
New importers the Philippines and Vietnam, which started
taking LNG shipments last year, have also bumped up their
purchases. Vietnam received three cargoes in April and May for
power generation, while buyers in the Philippines shipped nine
cargoes so far this year versus 11 for all of last year.
Rising demand for cooling is set to continue as Northeast
Asia enters its summer. Japan's meteorological agency forecast
likely higher-than-average temperatures from June to August, and
China's energy regulator warned power supply will be tight in
some regions the next few months amid growing consumption.
"Various weather forecasts suggest Northeast Asia may
experience hotter-than-normal weather from May," said Energy
Aspects analyst Min Na in a note, adding that restocking demand
for LNG in Asia will be higher year-on-year this summer.
"We forecast a total restocking demand of 2.4 million
tons this summer across Japan, South Korea and Taiwan, up by 2.3
million tons year-on-year and 0.1 million tons above the
five-year average."
Japan government data showed LNG stockpiles by utilities at
2.06 million tons as of May 26, below the five-year average for
the period, as Tokyo is already experiencing hot weather.
South Korean power generation company Korea Midland
Power Co (KOMIPO), Thailand state-energy firm PTT,
Philippines power producer First Gen and Bangladesh's
state-owned Rupantarita Prakritik Gas Co Ltd (RPGCL) have all
also issued tenders seeking LNG for delivery in July.