Hong Kong buys first LNG shipment amidst price drop

(Bloomberg) – Hong Kong, which is aiming to curb reliance on coal, agreed to import a first-ever shipment of liquefied natural gas (LNG) as a drop in prices revives interest in the fuel.

Utility CLP Holdings Ltd. purchased an LNG cargo for May delivery to its new import terminal, according to traders with knowledge of the matter. The tender closed on Wednesday, and the shipment was bought at a link to North Asia’s LNG spot benchmark.

CLP didn’t immediately respond to a request for comment.

The purchase is a milestone for the Asian financial hub, which saw its plans to begin imports of the super-chilled fuel delayed by Covid-19 and then disrupted by global energy shortages that pushed up prices. Coal makes up almost a quarter of Hong Kong’s electricity mix, and authorities have previously set an interim target to cease using the fuel for daily electricity by 2035.

A decline in prices after a mild winter and because of efforts by governments globally to curb energy consumption is rekindling interest among nations that currently don’t import LNG. Aside from Hong Long, Vietnam is also poised to import an inaugural LNG shipment this year.

North Asia’s LNG spot price has fallen to the lowest level since July 2021, according to traders.