Asia’s rapacious thirst for liquefied natural gas is sucking supplies from surprising places. China to Japan and South Korea are paying top dollar for the super-chilled fuel. The pull is so strong that Norway’s Statoil ASA, which usually exports most of its LNG to Europe, is shipping a rare cargo east. It plans to send more.
Asia gets most of its LNG from Australia, including from the giant Gorgon project on the country’s northwest coast. Malaysia, Papua New Guinea and Indonesia are also big suppliers.
Statoil’s tanker, the Arctic Aurora, due in South Korea this week shows how the LNG market is becoming global, with more cargoes travelling long distances from the Atlantic to the Pacific region as China leads a landmark shift to burning gas instead of coal. For Statoil, it’s a chance to squeeze a little more profit from its overall gas production that’s already near full capacity.
“What we’ve seen in Asia is strong prices,” said Peder Bjorland, Statoil’s head of natural gas. But “it doesn’t help to have strong prices if you don’t have the shipping capacity. It’s been difficult to get hold of spot vessels.” The producer has in the past sent cargoes to Malaysia, China, India and Japan, but it mainly serves the markets in Europe and
As well as shipping its own production from its Arctic plant, which produces about 40 cargoes a year, Statoil buys and sells LNG in the market. It traded about nine cargoes in each of past two years and has plans to handle more.