LNG prices increase amid geopolitical conflict

News: As per media sources, the Japan-Korea Marker (JKM) price for LNG has jumped ~28% to ~US$37/mmbtu on Friday (50% increase during the week) on concerns over disruption to global energy and commodities supply after Russia's invasion of Ukraine.

Views: Europe has been increasing its use of LNG (by lowering its Russian imports) and is directly competing with top-importing region like Asia. Global LNG volumes remain tight as big producers such as Qatar are locked into long term agreement with Asian buyers. The situation is likely to negatively impact volumes for Petronet (spot volumes) and margins of CGD companies (MGL, IGL, Gujarat Gas)

Impact: Negative