By Rhod Mackenzie

Now more and more often you can hear a new term - gas "inequality". We are talking about the fact that rich European countries buy liquefied natural gas (LNG) from poor Asian countries in the south of the continent and in Southeast Asia and force them to burn "dirty" coal again and pollute the planet's atmosphere even more.

“Naturally, Europe needs to get as much gas as possible after the loss of Russian pipeline gas,” asia.nikkei.com quoted Russell Hardy, head of the world’s largest oil trading company Vitol, at the opening of the Energy Asia 2023 conference in Kuala Lumpur. “Europe’s appetite for LNG has deprived Asia of a number of gas supplies, including all new supplies from the US. Asia will look to buy LNG in 2023, but the price will be much higher.”

Spot LNG prices in Asia are now well below the record $70 per MBU ($2,450 per tcm) in August 2022. In January-March 2023, Japan/Korea Marker (JKM) main gas hub prices fluctuated around $18 per MBTU, i.e. collapsed almost four times. In recent weeks, they have declined even more, but nevertheless they are still higher than the prices of recent years. In addition, experts are confident in their further growth if the winter in Europe is colder than last year.

High prices are putting pressure on Asia's LNG consumption, which is forecast to rise to 260 million tons this year from 252 million tons last year, Hardy said. However, despite this growth, it will still remain below 272 million tons (2021). He considers this a manifestation of the gas "inequality".

Tengku Muhammad Tawfik, president of Petronas, Malaysian oil and gas company Petrona, fears that long-term gas supplies to Asia are likely to decline.

The speakers at the conference talk a lot about the facts that the energy crisis hurts the most, at least so far, hitting not Europe and not Russia, but poor Asian countries.

Europeans boasted in the spring that there were no power and gas shutdowns in the winter, but they are wrong: there were blackouts, but not in Europe, but in poor Asian markets, recalls Michael Stoppard, head of gas strategy at S&P Global. - There were especially many of them. in southern Asia, where liquefied gas simply did not reach, because it was transported to Europe, where much more money could be earned for it. We are talking about countries such as Bangladesh, Vietnam and Thailand. These countries, Patrick Pouyanne, head of Total, said in Kuala Lumpur, because of Europe are now forced to return to coal, which they have so hard begun to abandon in recent years.

“I hope that the coming winter in Europe will be warm again,” said Patrick Pouyanne, “because if it is cold, Asia will lose (because of Europe) a lot of energy.”

As the head of the American gas company Tellurian, Octavio Simoes, emphasized, Pakistan, Sri Lanka, Indonesia and even Japan and South Korea are now burning much more coal than they did before the energy crisis. Due to high prices, Pakistan had to abandon a long-term natural gas development program and increase coal production.

Tengku Muhammad Tawfik, president of Petronas, Malaysian oil and gas company Petrona, fears that long-term gas supplies to Asia are likely to decline.

This article originally appeared in Russian at expert.ru