The world natural gas price is affected by many factors such as weather, supply-demand differences, wars between countries, etc. The fluctuating natural gas price not only affects the prices of other alternative fuels but also directly affects countries that depend mainly on LNG imports, including Vietnam.
1. The introduction of natural gas
Natural gas is currently evaluated as the cleanest fuel in terms of safety and efficiency in terms of economy, and it is used in a variety of fields such as industrial production, electricity development, fuel substitution for transportation, commerce, civil, etc.
Natural gas is similar to a fossil fuel, found in reservoirs below the earth's surface. After being extracted from the ground, natural gas is transported to the plant to remove impurities and redundancies, and processed for different purposes. The main ingredients of natural gas are methane (CH4), accounting for 85% and about 10% of ethane (C2H6) and other gas compounds such as propane (C3H8), butane (C4H10) and some other alkanes. Natural gas is colorless, odorless, lighter, and dissipates quickly in the air.
Read more: Liquified natural gas vs natural gas - What are diffirence?
2. Natural gas prices in Vietnam the World
The Global Natural Gas Price Index was at 197.5 index points in March 2023. A rising electricity demand, especially in Europe, had pushed up natural gas prices in the second half of 2021 to reach the peak, which was the main cause of the global energy supply shortage. The shortage became worse when the Russia-Ukraine conflict broke out. As a result, the natural gas price index has increased sevenfold compared to 2016.
In Europe, according to the PetroTimes, natural gas prices fell sharply in early March 2023 due to the influence of weather forecasts showing a slight decrease in cold at the end of the winter. Beside, gas inventories above seasonal levels are also the reason for the drop in gas prices.
At the present time, the world price of natural gas delivered at Henry Hub reached 2.59 USD/mmbtu in early March 2023, declining 31% from the early 2022 rate. According to IFC Markets, the natural gas price in Vietnam on May 11,2023, was 2.9 USD/mmbtu. Note that domestic natural gas prices do not use world gas prices as the basis for selling prices. The price of natural gas distributed by PV GAS and its subsidiaries is based on the price formula of Brent, FO, or LPG. However, the sharp increase in world natural gas prices can also stimulate the prices of alternative fuels such as FO and LPG to rise, affecting the domestic price of natural gas.
The summertime, when the climate warms up, along with the gradually stable gas supply and demand after the pandemic, may be the reason why the price of natural gas has returned to equilibrium since the beginning of this year. The price of natural gas, particularly the price of LNG, directly affects gas power development projects in Vietnam, especially when our country is dependent on imported LNG. Gas South has the advantage of simultaneously supplying LNG, CNG, and LPG fuels and a flexible fuel supply method for customers to choose from equipment investment, transportation, and operation. Gas South ensures flexibility in gas source, stability in quantity, competitive price, and optimal response to customers' needs.
Read more: Natural gas and the impact of using natural gas on the environment
In conclusion, this is all the information about the price of natural gas in Vietnam. If your company or customer needs to use and install LNG, CNG, and LPG gas systems safely and effectively, please contact Gas South at hotline: (+84.28) 3910 0108. Gas South always accompanies to bring the best solutions in business to customer.
