Asia may lose in the fight for Russian LNG due to the lack of gas storages

Marcel Salikhov commented to the Ekonomika Segodnya publication on the situation at the global LNG market.

Marcel Salikhov, President of the Institute for Energy and Finance, Director of the Center for Economic Expertise of the Higher School of Economics, confirmed that energy resources showed a trend towards shortages and rise in prices back in August-September last year. This was influenced by a number of factors, the most important of which are the post-coronavirus consequences and insufficient investment in the infrastructure for the production of traditional energy resources in order to promote the ideas of green energy.

“The notion that someone can buy up all LNG reserves is not entirely correct. The competition for spare LNG volumes has, in fact, intensified since the end of last year, and if we look at the actual supply data, Europe has significantly increased LNG imports this year. Asia has a different situation: for example, China increased imports by 20% every year, but this year they, on the contrary, reduced it,” the expert said.

Marcel Salikhov explained: for China, this was a necessary measure related to the economic consequences of the coronavirus – due to the pandemic, the economy in the region slowed down significantly, and even in the conditions of downtime of some industries, not so many energy resources were required. Regular seasonality also affects the fluctuations of the LNG market: in winter, demand for gas increases both in Asia and in Europe, because LNG is used not only for industry and electricity generation, but also for residential heating.