LNG Prices to Stay High Amid Middle East Supply Disruptions
Chevron Australia's Managing Director Balaji Krishnamurthy warns that liquefied natural gas (LNG) prices may remain high in the coming months due to supply disruptions from the Middle East. He told Bloomberg TV that he does not expect prices to decline for approximately the next six months.
The premium price of Australian LNG in Asia is partly due to Australia's geographical proximity to a key demand hub, according to Krishnamurthy. Chevron operates two major LNG production projects in Australia: Gorgon and Wheatstone. The former has a capacity of 15.6 million tonnes per year, while the latter can produce 8.9 million tonnes annually.
The Strait of Hormuz is currently experiencing delayed LNG flows, with some cargoes from Qatar and the United Arab Emirates being transferred to other vessels outside the strait in recent weeks. This insufficient supply volume will not meet demand ahead of the winter heating season in Asia and Europe.