LNG Price Crashes By Over 50% At International Market

The price of Liquefied Natural Gas, LNG,in the international market has plunged steeply by over 50% as crude oil prices continue to nosedive.

LNG buyers in Europe, who use to pay $9 per unit of LNG, now pay $5 or $6 per unit, after the price of crude dropped from $115 per barrel in June 2014 to less than $50 per barrel in May 2016, Thisday gathered.

It was also gathered that Asian LNG buyers that used to pay $15 per unit of LNG, now pay about $6 per unit because of the corresponding drop in the prices of crude oil.

Managing Director and Chief Executive Officer of Nigeria LNG Limited, Babs Omotowa, who confirmed the drop in LNG price, told Thisday in an exclusive interview that the gas prices were affected by the global slump in oil prices because gas prices were linked to oil price, as both were energy sources.

He revealed that there was a 70 per cent correlation in the price of oil and the price of gas.

Omotowa said: “So, when you look at NLNG’s Facts and Figures publication, which we released a few weeks ago, even the revenue of 2015 was 40 per cent lower than 2014 and even this year, our revenue will even be lower than in 2015. So, the gas market has seen a big drop.”

“This year, for example, in Asia where we use to get up to $15 per unit of gas, we get today about $5-$6. In Europe where we used to get $9 per unit, we get about $5 -$6. So, the price of gas has also come down; revenues have dropped,” he explained.