IEA: Gas Trading Hubs Needed for Asia
Asia is on course to become the world’s second largest gas market, after North America, by 2015, a new report from the International Energy Agency says.
Yet the future role of gas in Asia “will depend considerably on how the pricing of natural gas is tied to the fundamentals of supply and demand in the region,” said IEA Executive Director Maria van der Hoeven Tuesday as she released the “Developing a Natural Gas Trading Hub in Asia” report in Tokyo.
Natural gas trading in the region predominately relies on long-term contracts in which the price of gas is linked, or indexed, to that of oil.
But this practice has kept Asian gas prices much higher than those in other markets.
Currently, Asian nations are importing gas at prices five times higher than North American gas trading hubs.
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