Gas prices down

With international oil prices continued to decline in 2015, natural gas prices are also under tremendous pressure. This would be positive for the restructuring of China Energy.

This should be a winter peak demand of natural gas prices should rise, but according to statistics data, in November 2014 China liquefied natural gas (LNG) imports an average price of $ 604 / ton, compared with $ 641.07 in October 2014 in / ton chain fell 5.77 percent, while the average price of pipeline gas imports in November 2014 compared with October also fell 11.34% MoM.

Chairman of the king Policy Institute at King’s College London, Nick Butler noted that the current natural gas prices have started to decline, the US natural gas prices during December for the first time fell below $ 3 / million British thermal units since 2012, and this is just the beginning.

Why is there such a gas price trends? Qie Jing gas analyst attributed first international crude oil prices continue to fall. She told the “China Sankei Shimbun,” told reporters that the continued decline in international crude oil prices led some countries to re-use turbine oil, reduce the demand for LNG spot, continued weak demand led to the Asian LNG spot prices fell below $ 10 / one hundred Wan Btu, the highest in nearly three years to a new low.

It is predicted that in 2015 the price of crude oil is likely to remain at low levels. Qie Jing think this will further affect spot LNG demand, resulting in LNG spot prices continue to decline.

Ampang consulting a research report points out another reason gas prices are expected to fall: There are indications that Japan is ready to accept the gradual recovery to enable nuclear power plant, the initial pace will be relatively small, but even this step is enough to weaken the natural gas prices in Asia, Prior to the Japanese were forced to import natural gas to replace nuclear power, resulting in several Asian gas prices approaching $ 20 / million British thermal units, each nuclear power plant operators have a recovery will reduce demand for natural gas; as prices soar in 2011, as now they will fall back.

Due to lower natural gas import costs, the state can enhance gas imports, now is a good time to encourage large-scale imports, cleft Jing stressed that “a good time to import natural gas is equivalent to a good time to China’s energy structure adjustment.”

Ampang Consulting also believes that China should be timely to increase gas imports to replace fossil fuels.

In the “Action Plan for Energy Development Strategy (2014-2020 years),” June 7, 2014 the State Council issued a clear will “optimize the energy structure” as a strategic task of China’s energy development, namely, “to reduce the proportion of coal consumption, increase natural gas the proportion of consumption, the safe development of nuclear power, and vigorously develop renewable energy. ”

The document also proposed that by 2020, total primary energy consumption control in about 4.8 billion tons of standard coal, coal consumption control in about 4.2 billion tons. By 2020, non-fossil fuels in primary energy consumption to 15% the proportion of natural gas share of more than 10%, the proportion of coal consumption control in less than 62%.

It seems that the international price of natural gas is expected to decline in silence seems to fulfill the realization of China’s energy development strategy plan. Decline in natural gas prices, the first impact is that the coal industry.

In cleft Jing view, if the future of natural gas prices, downstream users will certainly choose natural gas as a fuel, it will reduce the demand for coal, coal prices further suppress, but did not cause a severe shock to the price of coal, natural gas and coal because of the relationship between the only alternative, there is no comparability between the two economies, not because of price changes either directly affect the price of the other, there is a certain level of economic performance between the two.(