LNG Pricing Components Reviewed for Philippine Gas Industry Master Plan

Article excerpt

With the pricing of liquefied natural gas (LNG) becoming more a regional affair after the 'shale gas revolution' in North America, the proposed Philippine Gas Industry Master Plan will be re-assessing pricing among its core components.

That will be on top of the regulatory framework that will be set for

the industry, as well as the synchronization of various project components - such as the LNG re-gas terminals and the pipelines.

LNG pricing so far had been split into three - one is the American jurisdiction with the lowest price; the other is the European index; while another is in Asia.

The price of LNG in the Asian market is seen softening to $13-$14 per million British thermal unit (BTU) with more definite energy choices being laid down now by Japan post the 2011 Fukushima disaster, experts claimed.

Albeit qualifying that he is not giving forecasts, Platts global director on market reporting Jorge Montepeque indicated that the gas pricing trend is on its way down.

Somehow, that will be a softening from the $17 to $18 per million BTU experienced in the Asian market for gas - when Japan was still anticipated to be shifting to LNG for its energy mix to replace the capacity of its nuclear units which were shut down following the Fukushima tragedy.

Given the enticing $10 price difference in Asia, global gas producers have been opting to re-focus their attention on bringing their gas supply to this part of the world. That was because prices in the United States have almost reached basement level at $3. …