Natural gas in Asia: trade, markets and regional institutions

Vivoda, Vlado (2014) Natural gas in Asia: trade, markets and regional institutions. Energy Policy, 74 C: 80-90. doi:10.1016/j.enpol.2014.08.004


Author Vivoda, Vlado
Title Natural gas in Asia: trade, markets and regional institutions
Journal name Energy Policy   Check publisher's open access policy
ISSN 0301-4215
1873-6777
Publication date 2014-11-01
Year available 2014
Sub-type Article (original research)
DOI 10.1016/j.enpol.2014.08.004
Open Access Status DOI
Volume 74
Issue C
Start page 80
End page 90
Total pages 11
Place of publication London, United Kingdom
Publisher Elsevier
Language eng
Subject 2100 Energy
2308 Management, Monitoring, Policy and Law
Abstract Natural gas trade in Asia has been dominated by long-established market structures, under which liquefied natural gas (LNG) has remained indexed based on the price of crude oil. High transaction costs in the region in recent years imply that the regional market is sub-optimally organized. Since 2010, the continued prevalence of oil-indexation has had the most adverse effect on Japan, the world's largest LNG importer. In response, Japan implemented several strategies to challenge traditional LNG pricing mechanisms in the region and ultimately reduce transaction costs. Japan's efforts include an increase in the share of spot and short-term purchases, sourcing new supplies from the United States under alternative pricing arrangements and driving regional buyer cooperation. This paper evaluates the potential effect of Japan's LNG strategy on regional pricing in the broader institutional context, arguing that LNG pricing in the region will only partially shift away from oil-indexation by the end of the decade. While recent cooperation among regional LNG importers indicates that there may be scope for change in the regional institutional setting, the degree of cooperation is insufficient to have a profound effect on regional pricing.
Keyword Natural gas
LNG
Asia
Trade
Market
Institutions
Q-Index Code C1
Q-Index Status Confirmed Code
Grant ID DE120101090
NRF 2012S1A3A2033350
139686
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Centre for Social Responsibility in Mining Publications
Official 2015 Collection
 
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