According to French “Echos” on January 16, at the beginning of this week, the price of LNG imported from Northeast Asia reached more than 30 US dollars per million British thermal units. Michael Stoppard, an analyst at Eschen Huamei, commented: “The record has been broken.” Under the premise of equal energy production, the price of natural gas has reached twice that of oil, which has never been seen before.
As reported, in 2020, affected by the health crisis, natural gas prices fell sharply, but then rebounded strongly from December. In Rotterdam, the Netherlands, natural gas prices in Asia and Europe reached their highest level since September 2018.
Since last summer, the amount of French personal gas bills has risen. And given the continuing rise in international market prices, this trend may continue. In the natural gas wholesale market, the average price of natural gas this week exceeded 28 euros per megawatt hour, reaching the highest level since 2018.
The report pointed out that this special situation was the result of multiple factors. First, North Asia was extremely cold this winter. The temperature in Beijing, the capital of China, dropped to minus 20 degrees Celsius. The last time the city experienced such low temperatures was in the 1960s. The temperature in South Korea and Japan was also lower than before.
The trend of rising gas prices appeared at the end of 2020, but it was further stabilized with the advent of this cold wave. In Asia, as the health crisis has ended, the demand for gas for heating, power generation systems and industry has even exceeded pre-epidemic levels.
This was reflected in the substantial increase in liquefied gas imports: in December 2020, more than 26 million tons of liquefied natural gas arrived on the coast of Asia, an increase of 14% compared to the level in December 2019. China is the world’s second largest importer of LNG, second only to Japan and ahead of South Korea.
According to the report, in the case of such strong demand, supply was tight and prices have soared. To make matters worse, LNG production plants in Norway, Australia and Equatorial Guinea had to reduce exports for technical reasons. In addition, the United States reduced production during the worst period of the epidemic last year, resulting in low global stocks.

What’s worse was the tense LNG shipping situation. As there were not enough transport ships, transportation costs have risen at an unprecedented rate.
Escin Huamai pointed out that in early January, the daily rent of an LNG ship reached US$350,000, and this figure was only US$200,000 in the winter from the end of 2018 to the beginning of 2019. As the Panama Canal is congested, it will be two weeks later for US natural gas to reach Asia via the Pacific.
The sharp rise in Asian natural gas prices has induced producers to supply the region, resulting in a significant reduction in European LNG imports. The reduced supply has led to an increase in the price of natural gas in Europe, which was far less than in Asia.
The report pointed out that the oil and gas company made a fortune and made up for part of the loss caused by the sharp drop in oil revenue. In the fourth quarter of 2020, France Total’s natural gas price increased by more than 30% from the previous quarter. Thierry Bross, a professor at the School of Political Sciences in Paris, France, pointed out: “The industry’s reduced production when demand weakened last year proved that its elasticity exceeded expectations. Now is the time to reap the results.”