When everyone is concerned about the collapse of the crude oil market, the global natural gas market is also facing great challenges. Buyers in Asia and Europe have cancelled at least 20 US LNG shipments, Reuters reported. Global demand for natural gas is declining, with cheniere energy, the leading us LNG exporter, estimating that 10 shipments have been cancelled.
Due to the sharp increase in supply last year, the price of liquefied natural gas in Asia had fallen sharply before the outbreak. Recently, the price of LNG delivered in June in Asia is $2 per million British heat, just slightly higher than the price of Henry hub in the United States. In October last year, the price of liquefied natural gas in Asia was about 7 US dollars / million British heat.
According to Reuters, the problem for us natural gas exporters is that, after accounting for liquefaction and transportation costs, the break even price of natural gas sent to Asia is about $5.56 per million British heat, but the current price is less than half of the above level. Gas exports tend to be fixed under strict contracts, but now the trade in these goods is likely to be cancelled.