China, India, Pakistan LNG Demand Set for Comeback

Asian spot LNG prices have climbed to nearly $30 per million British thermal units, a sharp increase from around $10 per MMBtu, due to supply disruptions originating from the Middle East. These tensions have hindered exports from Qatar and the United Arab Emirates through critical shipping routes. Consequently, demand in key markets like China, India, and Pakistan has seen a decline, with some industrial users switching to coal and oil.

In India, the high cost of LNG has made it less viable for price-sensitive industries, prompting a shift to alternative fuels. GAIL has been actively seeking alternative cargoes to compensate for lost supplies. Industry forecasts suggest that substantial new LNG volumes, estimated between 150 to 200 million tonnes, will enter the market in the next four to five years.

Pakistan's LNG demand is poised for a resurgence, contingent on more affordable pricing and increased supply availability. Similarly, China's gas-fired power plants are expected to boost consumption once LNG prices normalize to a range of $7 to $9 per MMBtu, supported by strong electricity demand growth. Experts predict a temporary dip in demand, with a strong recovery anticipated as supply conditions improve and prices stabilize globally.