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Asia Takes Steps to Avoid Winter Gas Crisis

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Europe's scramble for gas has put extra pressure — and costs — on Asian importers looking to guarantee their energy security this winter. Northeast Asian LNG buyers are furiously trying to fill storage capacity ahead of what some expect to be a "winter from hell" in gas markets. Only China largely remains out of the spot markets, since its strict "zero Covid" policy is capping demand, which is also met partly by cheaper pipeline gas from Russia and domestic LNG supply. In South Asia, buyers have been priced out of the ultra-expensive LNG market for months. Rather than seeking to buy spot cargoes, traders there have been trying to close swap deals to optimize their positions. Over the past two months, Taiwan’s CPC, South Korea's Kogas, and Japanese firms Kansai Electric and Jera have been active in the spot market to secure winter cargoes. While many cargoes have traded at discounts to the historically high Japan Korea Marker, Asia’s de facto benchmark, they are still pricey. Nevertheless, governments have made energy security a priority as Europe's gas crisis spills into global LNG markets.

Topics:
LNG Demand, LNG Forecasts, LNG Supply, LNG Trade, LNG Prices, LNG Spot Trade, Gas Demand, Gas Supply, Gas Inventories, Gas Prices, Gas Spot Markets, Ukraine Crisis
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