Platts: Lower Oil Prices Unlikely to Lure Japanese Utilities Away from LNG

Recent falls in global oil prices were unlikely to prompt the switch from LNG to oil by Japanese power utilities seen earlier this year as LNG spot prices were this time likely to remain competitive, Eclipse Energy said this week.

According to Eclipse, a natural gas analytics and forecasting unit of Platts, the trigger point for utilities to turn off their least efficient gas-fired units and restart high efficiency oil-fired units is around $8.30/MMBtu for October, $8.41/MMBtu for November and $8.51/MMBtu for December.

The Platts JKM for cargoes for delivery in October was assessed at $7.85/MMBtu Tuesday, more than 40 cents lower than the potential switching threshold.

JKM swaps for November were assessed at $7.70/MMBtu and for December at $7.75/MMBtu. MORE