Asian gas prices will rise while US prices flounder? Unfortunately, global gas prices have been converging for some time, in 2013/14 the landed price of gas to China and Japan was often double the landed price to the UK. These days as the following chart shows, the landed price for gas to all three countries is generally pretty much the same and that won't change. So increased demand from China is not going to translate into significantly higher prices for Asian gas. Having said that there are geopolitical reasons why China would buy Asian gas and pay a premium for it. In its dealings with Iran the USA has shown a readiness to punish the oil industry as a proxy for the nation. The second reason we can have confidence in commercialisation of our gas is that the PNG Govt made a major mistake in allowing all PNG LNG gas to be exported. So PNG LNG gas now lights the homes in metropolises including Tokyo, Beijing and Taipei while the restless and impoverished Western Province villages remain in darkness with no lights at all. It is now Government policy to mandate the use of PNG gas on a commercial basis for mining, industrial and domestic power and the main instrument of that policy is Kumul, the national oil and gas company. Kumul has been taking a strong interest in the commercialisation of Horizon's gas for that very reason. It is very likely, in my opinion, that our reserves will be commercialised and that Kumul will be a major stakeholder in the project.
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