| 来源类型 | Research papers
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| 规范类型 | 报告
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| A study on LNG pricing for trade in Asia |
| J. H. Park
|
| 发表日期 | 2014-12-31
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| 出版年 | 2014
|
| 语种 | 英语
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| 摘要 | ABSTRACT
1. The Purpose of the study
As the market of international natural gas has been changing by various dynamics, pricing mechanism for natural gas trade is expected for a change. The more source of supply get increased and varied, the more improvement in supply and demand situation for the world natural gas is substantial. On the contrary, since the natural gas prices of long term contracts(LTCs) have been decided by crude oil prices in Asia with much higher rate than from North America and Europe is raising more necessity in improvement of natural gas pricing mechanism. Northeast Asia trade agents and related organizations for natural gas/LNG have been aware of this necessity in improvement of Asian premium solution and trade environment. Thus, they have been cooperating with others to lower Asian premium and try some other efforts to improve gas supply and their pricing mechanism.
It is well known that the trading flexibility is low in the area of the Northeast Asia due to adapting the long term contracts in the most rigid form. Also, lacking trading platform and proper price benchmark indice for supply and demand situation within the area are also being pointed out as why long term contracts are prolonged. However, it has already begun by the end of 1990s with the EU natural gas market liberalization policy in Europe that transparent and flexible trading hubs such as NBP, TTF to be affected vigorously. Therefore, pricing based on trading hubs has been used into spot trades more increasingly and various changes of market have already begun, for instance, indexing spot prices partially in pricing formation of the traditional choice of long-term contracts with original gas suppliers in large scales. So voices are being raised to establish natural gas & LNG trading hubs in Northeast Asia as well so it can increase flexibility and set appropriate market pricing indice within the area. Hence, this research will thoroughly examine various relations and changes in pricing mechanism rules as according to its change of market and trade in Europe. Thus, how natural gas trade pricing mechanism rule may be affected differently when trading condition changes from Northeast Asia will be the mainly discussed in this study.
2. Research & Results
Europe is pursuing a fundamental resolution in all regions of EU to change natural gas pricing mechanism within the area by pressing forward natural gas liberalization and harmonization under the lead of EC(European Commission). Europe has been guaranteed for supplies through long term contracts with corporate suppliers similar to Asia; thus, crude oil prices mainly determine the trade prices.
So in this situation, EC has confronted against by establishing the Energy Package to deal with unfair trading contract articles regarding to corporate suppliers manipulating the market using their market dominance. In 2009, they established the Third Energy Package and GTM(Gas Target Model) and they are reinforcing their efforts to increase union of gas market in Europe to stand against predominant suppliers. The changes are being eminent in Europe for successful results from trading hubs such as NBP, TTF and as well as their pricing mechanism determination. Now the spot trading in Europe has increased much higher than in 10 years. And oligopolistic exporters are changing to accept more of buyers�� requests in their contracts. It may have been for suppliers to be affected to change strategically by the crisis of demand depression due to continuous economic recession in Europe. However, it will maintain the same if trade flexibility increase, liberalization and semi anti-trust regulation kept validated.
Northeast Asia is paying premium for imported gas when other markets in regions including Europe aren��t. It is because corporate project providers or oligopolistic exporters just like the Europeans have been finalizing pricing mechanism rule due to lacking own productivity within the area and increasing gas price. But mostly it is lacking actively functioning market and market price indice reflecting its market supply and demand conditions to initiate vigorous trading within its own area which becomes a main cause of this problem. If, like European case, it is possible to set up condition for trading within the area such as establishing systematic and flexible trading platforms, buyers would become able to trade via hubs and trading price will be finalized by principle of market. So when trading hubs are functioning vigorously within the area, traditional long term contracts will possibly change in its pricing mechanism rules just like European case. Nonetheless to say that many conditions differ in Asia from Europe, in terms of trading environment or regional situations, it won��t be having exactly the same effect of change just like the one in Europe. However, it seems that both have equal conditions such as existence of both pre-dominant suppliers and buyers who want supply stability in trading market for natural gas/LNG. And it may very well be predicted to have a change affected within the area for a negotiation when after trading hubs is established as replacement. This change of negotiation between two relations will directly affect Northeast Asia for gradual changes in pricing mechanism rule to be introduced based on market prices not by traditional crude oil-indexed long term contracts. |
| URL | http://www.keei.re.kr/web_keei/en_publish.nsf/by_report_year/68EE90797E6E800349257E110020F905?OpenDocument
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| 来源智库 | Korea Energy Economics Institute (Republic of Korea)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/322834
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推荐引用方式
GB/T 7714 |
J. H. Park. A study on LNG pricing for trade in Asia. 2014.
|
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