Terms of natural gas sales are changing. In the power sector gas no longer competes with oil, but coal and renewables – making hub-indexation traders' preferential choice. In Asia, the Platts Japan Korea Marker (JKM) grows in popularity and several long-term gas supply contracts have come under review following the recent plunge in oil prices.
U.S. Energy Information Administration (EIA) expects a rebound in Henry Hub spot gas prices due to falling production in the Appalachian and Permian Shale, where low oil prices led to shut-ins of wells. Dry gas production is seen average 84.9 Bcf/d in 2021, pushing up Henry Hub prices to $2.89/MMbtu.
Zhonghua Gas’ first quarter results have been “seriously impacted” by the Covid-19 outbreak. Total revenue for the three month ending March plunged 29.5% to HK$75.10 million, while net profit after tax fell 72.5%. Going forward, the Hong Kong-listed group strives to expand LNG sales in greater Shanghai.