Analysts cited by Reuters project that Asian demand for liquefied natural gas will shrink by between 3% and 10% this year, delivering the region’s second straight annual decline in LNG consumption. The contraction is concentrated in the continent’s northeastern markets, which account for the bulk of the shortfall.
The price surge driving the demand drop follows a force majeure declaration by QatarEnergy on its exports, a move triggered by Iranian strikes on the Ras Laffan gas hub. The disruption has lifted global LNG prices sharply.
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Industry observers note that much of the demand destruction has been absorbed by Northeast Asia, where utilities are shifting to coal and other fuels to offset the higher cost of LNG.
