Asia’s LNG Market Poised for Price Alternatives, IEA Chief Says

September 11, 2013 Leave a comment

Asia’s LNG Market Poised for Price Alternatives, IEA Chief Says

By Chou Hui Hong – Sep 10, 2013

Asia’s liquefied natural gas market is poised to introduce alternatives to oil-indexed pricing as supply expands from new sources, according to the International Energy Agency. “When you have a more flexible gas market, with more gas being brought to Asia, it will certainly help” lead to new gas-pricing methods, Maria van der Hoeven, executive director of the IEA, said in Tokyo today.An estimated 80 new LNG tankers are under construction in South Korea and Japan and not committed to long-term contracts, helping to increase delivery options, she said. Gas will come to Asia in a couple of years from Russia, which has the world’s largest reserves, as it looks for new markets to replace slowing European and domestic demand, van der Hoeven said. The U.S. has approved exports of LNG from three projects.

“There’s new LNG from North America, new ships being built, and discussion going on in Asia that something needs to be done,” van der Hoeven said.

There have been proposals to move LNG prices away from the market’s traditional oil link toward exchange-traded futures contracts or natural gas benchmarks.

The IEA is also working with the International Energy Forum, OPEC and gas-exporting countries to create a joint data initiative for gas as regional markets become global, van der Hoeven said.

To contact the reporter on this story: Chou Hui Hong in Singapore at chong43@bloomberg.net

Filed under Macro Trends

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