China’s switch from coal to natural gas is adding a lot of demand to the global gas market, pushing up LNG prices to three-year highs. China has made significant headway in shutting down dirty coal plants, but as gas consumption ramps up, the country has had trouble finding enough gas.
As China gobbles up more LNG cargoes, LNG prices are rising quickly. “We were optimistic on the opportunity in China, but the magnitude surprised us,” Anatol Feygin, chief commercial officer at U.S. LNG exporter Cheniere Energy (NYSE: LNG), told the Wall Street Journal. LNG prices in Asia rose to $11.70/MMBtu, the highest price since November 2014.