DOMESTIC prices for liquefied natural gas (LNG) have topped 7,000 yuan (US$1,061) a ton, the highest since at least 2011, as demand soared with millions of homes burning gas for the winter instead of coal.

Wholesale LNG prices have gained more than half their value from mid-November, meaning the jump in prices has come less than two weeks into northern China’s heating season.

Two LNG dealers in the northern province of Hebei said the price could possibly be a record high as China’s LNG market is much less developed than other commodities, with significant imports of the fuel appearing only over the last five years.

“There are too many customers chasing too few supplies,” said Qu Xiuzhi, a manager with privately-run Xinkun Gas.

Xinkun Gas hauls the liquid fuel in hulking trailers to steel mills and porcelain makers in Tangshan, China’s steel capital east of Beijing.

State-owned oil firms are maximizing production at domestic gas fields and boosting LNG imports at receiving terminals, although that has not kept the surge in demand from the government’s gas push from outpacing supply.

“It’s a huge challenge for us to secure every extra truckload of LNG,” said Li Ruipeng, a manager with a separate Tangshan-based dealer Huapu Gas.

Li said more than 20 percent of his company’s tanker truck fleet of more than 60 vehicles are idle because supplies from both import terminals and inland gas liquefaction plants are falling short.

That has forced both Xinkun Gas and Huapu Gas to cut back or suspend fuel deliveries to some of their clients, such as filling stations for compressed natural gas and steel mills.

Import terminals run by China National Offshore Oil Co. and PetroChina are quoting ex-terminal prices much lower at 4,700 to 6,040 yuan a ton, but dealers are asking around 7,000 yuan, according to Qu and Li.

LNG plants in Inner Mongolia, Shaanxi, Shanxi, Hebei and Shandong were pegging wholesale prices Monday at 6,950 to 7,050 yuan a ton, according to an LNG price monitoring agency based in East China’s Jiangsu Province.

China’s imports of LNG in October nearly doubled from the same month a year ago to the second highest on record, according to the General Administration of Customs, as companies boosted imports of the fuel ahead of the winter heating season.(SD-Agencies)