Other than knowing about the benefits, applicability and price competitiveness of natural gas, you should also be well aware of the reasons causing the recent price increase of natural gas.
For the new adopters of natural gas, while you are slightly late to the market now that prices are now starting to increase, there is no need to worry too much. With technological improvements within the natural gas market, there are solutions for you to combat these price surges.
Strong Economic Growth
With economic growth comes increased demand for goods and services and hence greater demand from the commercial and industrial sectors. Along with the growing influence of environmentally friendly initiatives, consciousness concerning the greener use of fuel has contributed to the increase in consumption of natural gas (all thanks to its more eco-friendly nature). All these thus results in higher prices
Weather-based demand surges
Recall the extensive applicability of natural gas for varied functions? This means that any factors influencing the behaviour of residential and commercial consumers will greatly alter demand and hence prices.
For example, the demand for heating increases during winter weathers, increasing demand for electricity and hence natural gas, leading to price increases. Price surges are even more significant when these weather changes are sudden and unexpected because supply will not be able to react fast enough to manage the short-term increase.
With that being said, having sufficient gas supplies storage will be a great way to bolster the impact of demand surges.
Insufficient natural gas supplies storage
High economic growth and abrupt weather changes will not pose a problem if there were ample gas supplies in storage. Having a strong storage infrastructure can help ensure energy security where gas supplies can be channeled for storage during times of low demand and be used to support a sudden increase in electrical demand needs during bad weather conditions.
There seem to be problems with this aspect of the natural gas market. “With the US gas storage at 7% below last year and 3% below the five-year average”, there is an urgent need to boost storage facilities and step up efforts in ensuring greater energy security
What can we do?
While we see gas storage as the most crucial factor in contributing towards rising prices for natural gas and that weather is not something that we are able to control for, there is still good news!
Thanks to the invention of liquefied natural gas (LNG), gas supplies can now be obtained outside of national boundaries. This brings forth gas supplies diversification and hence helps cushion the impacts of sudden weather changes.
LNG allows for natural gas to be transported using conventional transportation methods such as lorries, without needing the use of the traditional physical pipelines. As such, during periods where natural gas supplies are low, LNG can be imported to make up for the shortfall.
Point is: there is not much to worry about the increasing natural gas prices
Wonder where you can get your LNG supplies?
Come and talk to us at GasHub!
With a track record as a leading gas piping and engineering services specialist in Singapore within both the public and private sector, we are pleased to announce that our new utility arm, specializing in the distribution of LNG, is here to serve you and your consumption needs.