Prices for LNG Heading to Japan Drop 42.5% Year Over Year for May

LNG tankerHow low can world LNG prices go? One of the potentially important markets for U.S. LNG is Japan. Historically when drillers would get $3-$4 per thousand cubic feet (Mcf) here at home, they could easily get $8 or more per Mcf in Japan–if they could just get the gas loaded onto ships and get it there. Hence facilities being built like Dominion’s Cove Point, Maryland, which export gas to Japan (and India). But something happened on the way to the LNG party. Last December Platts reported LNG deliveries to Japan and Korea were fetching $7.40/Mcf (see Platts Says LNG Heading to Japan & Korea Fetching $7.40/Mcf). By February, that number had tumbled to $5.34/Mcf (see LNG Exports to the Rescue in Northeast? Not So Fast). That number has fallen even more. Today LNG going to northeast Asia is only fetching $4.24/Mcf–the lowest in seven years. Ouch. Why are the prices tanking in Japan and Korea?…

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