Luo Yizhou, CEO of PetroChina International (PCI), the trading arm of the state energy major, said the company was working on the Sunday of February 28 in lieu of the Lunar New Year holiday when the U.S. and Israel launched attacks on Iran.
"We had a meeting for something else, planning for this year, and then suddenly we saw the news, and then we switched the topic to how to secure supply," Luo said.
"We were probably one day ahead of the market because most of the other companies start to work on Monday."
GAIL's Gupta said India had to limit gas consumption initially but resumed supplies to almost 90% to 95% as it ramped up its trading capability to buy LNG from elsewhere.
Both GAIL and PCI executives expect the Middle East conflict to have a temporary impact on demand in their countries, with consumption to rebound once prices fall and global supply recovers.
"We are hoping that all this is very short term, and in the coming days, in mid-term and long-term, things will become normal," Gupta said, adding that there may be about 150 million to 200 million tons of LNG coming online in the next four to five years which could cool prices.
"The sectors like the power sector in our country, like the various industries, they are going to go for more gas ... because it's a cleaner fuel," he said.
In China, PCI's Luo expects demand from gas-fired power plants to rebound once LNG prices return to a "normal" range of $7 to $9 per MMBtu, citing strong growth in electricity consumption even as LNG imports have fallen.
"I think it is due to the temporary suppression of the demand faced by high price," Luo said.
"I don’t think it will kill the demand in China."
Spot prices surge as Asia competes for limited supply
Shell SHEL.L, the world's biggest LNG trader, estimates the world has lost about 36 million tons of LNG from the Middle East so far this year, President for Integrated Gas Cederic Cremers said.
Asia's spot prices have surged to nearly $30 per million British thermal units, from a pre-war range around $10 per MMBtu, as the region is competing with Europe for limited supplies ahead of winter.
GAIL and PetroChina say higher prices are hurting demand
"The prices have hit through the roof ... and that is definitely impacting the demand insofar as India is concerned because there are a lot of sectors which are price sensitive," GAIL GAIL.NS Chairman Deepak Gupta said at the Gastech conference in Bangkok.
"There are many industries which switch over to different fuels in case gas is not viable for them," said Gupta, who heads India's top natural gas distributor by market share.
Both GAIL and PetroChina 601857.SS, China's top LNG importer, have deployed their trading teams to scour for alternative cargoes to replace Qatari and Emirati supplies since the war broke out.
China and India see LNG demand rebounding after prices ease
China and India's LNG imports are likely to rebound from multi-year lows once the Middle East supply crunch ends and prices ease, industry executives expect, reversing a pick-up in coal and oil use to generate power due to the U.S.-Iran war.
The conflict has prevented Qatar and the United Arab Emirates from exporting most of their LNG via the Strait of Hormuz, where a fifth of global supplies used to pass, driving up prices and curbing demand in Asia.
XLE•
