LNG Prices Set to Remain High Amid Middle Eastern Supply Disruptions
Chevron Australia's Managing Director Balaji Krishnamurthy expects LNG prices to remain high in the short term due to supply disruptions from the Middle East. In an interview with Bloomberg TV, Krishnamurthy stated that he has a hard time seeing prices come down in the next six months or so.
The supply disruption is causing Australia's LNG to trade at a premium in Asia, despite its geographic proximity to key demand centers. Chevron operates two massive LNG projects in Australia: Gorgon and Wheatstone. The two projects account for about 5% of global LNG supply, with Gorgon being the largest in Australia.
The spot Asian LNG price for October delivery into northeast Asia has jumped to its highest level since 2022, amid the re-escalation in the Middle East that further delayed any recovery of LNG flows out of the Strait of Hormuz. The lack of meaningful recovery of Middle Eastern LNG flows and the intensified race between Asia and Europe for winter gas supply has pushed the average price for October delivery into northeast Asia to $26.00 per million British thermal units (MMBtu).