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Global LNG price won’t see gas compete with coal in Asia

Gas will not overtake coal in the power generation merit order of Asia’s emerging economies even with a shift in global LNG pricing to the Henry Hub, analysts say Gas will not overtake coal in the power generation merit order of Asia’s emerging economies even with a shift in global LNG pricing to the Henry Hub, analysts say.
By Alessandro Vitelli 3 November 2015 0 18161
The Cameron LNG project in Louisiana. Global LNG pricing could shift to the US benchmark. (Sempra)

A shift in global LNG pricing to a United States benchmark will still leave gas trailing coal in the power generation merit order of Asia’s emerging economies, according to analysts.

Speaking at the Coaltrans conference in Barcelona last month, Trevor Sikorski, agas and carbon analyst at Energy Aspects in London, suggested spot prices will fall as more LNG becomes available, forcing some sellers to withdraw from the international market.

"So the market will balance by closing the arbitrage and North American gas will stop going to Europe...