PL EN


2020 | vol. 64, nr 6 | 127-141
Article title

Competition on the LNG market – consequences for the EU

Authors
Content
Title variants
PL
Konkurencja na rynku LNG – konsekwencje dla Unii Europejskiej
Languages of publication
EN
Abstracts
EN
The aim of this article is to assess the impact of the natural gas sector’s gradual transition towards a globally-traded commodity market for EU economies. The literature review provides evidence of regulatory, technological and business practice changes that have led to the development of a global gas market. A statistical analysis of the price spreads between the regions and of the differences in the LNG shipment costs is performed to verify whether competition over cargoes at a global level observed over the last years is not temporary. The results confirm that the market-based price indices have become a more relevant and popular form of price reference for short and long-term LNG supply contracts than oil indexation. The author concludes that the transition from regional markets to a global market has brought multiple benefits to EU economies that can be largely lost if Asian economies will be ready to pay substantial premiums for LNG cargoes in the future.
PL
Celem niniejszego artykułu jest ocena wpływu ewolucji sektora gazu ziemnego w kierunku globalnego rynku towarowego na gospodarki Unii Europejskiej. Literatura przedmiotu dostarcza przykładów zmian w środowisku regulacyjnym i biznesowym oraz zmian technologicznych, które przyczyniły się do rozwoju globalnego rynku gazu ziemnego. Przeprowadzono analizę danych statystycznych w zakresie cen gazu ziemnego w różnych regionach świata oraz w zakresie różnic w kosztach dostaw LNG celem weryfikacji, czy globalny charakter handlu gazem ziemnym nie jest zjawiskiem tymczasowym. Wyniki potwierdzają, że rynkowe indeksy cenowe stały się bardziej przydatnym wyznacznikiem wartości gazu ziemnego w krótko- i długoterminowych umowach dostaw LNG niż indeksowanie względem cen ropy naftowej. Autor dowodzi, że rozwój globalnego rynku gazu ziemnego przyniósł wiele korzyści gospodarkom UE, które mogą zostać utracone, jeżeli gospodarki azjatyckie będą gotowe płacić więcej za dostawy LNG w przyszłości.
Keywords
References
  • Agency for Cooperation of Energy Regulators. (2019). ACER Market Monitoring Report 2018 – gas wholesale market volume. Ljubljana: ACER.
  • Benito, A. (2009). Accurate determination of LNG quality unloaded in Receiving Terminals: An Innovative approach. Retrieved from http://www.iapg.org.ar/WGC09/admin/archivosNew/Special%20 Projects/4.%20IGU%20Best%20Practices/4.%20IGU%20Best%20Practices%20FINAL%20-%20CD%20contents/8.%20LNG%20-%20Accurate%20determination%20of%20LNG%20quality%20unloaded%20in%20receiving%20terminals.pdf
  • Chong, Z. X. (2019). Changing Asian gas markets. Retrieved from https://www.doi.gov/sites/doi.gov/files/migrated/intl/itap/upload/Session-01-01-Changing-Asian-gas-markets-Presentation.pdf
  • Directive 98/30/EC of the European Parliament and of the Council of 22 June 1998 concerning common rules for the internal market in natural gas (Official Journal L 204, 21/07/1998).
  • Dobrota, D., Lalić, B., and Komar, I. (2013). Problem of boil – off in LNG supply chain. Transactions on Maritimes Science, (02), 91-100.
  • Energy Information Administration. (2017). Perspective on the development of LNG market hubs in the Asia Pacific region. Retrieved from https://www.eia.gov
  • European Commission. (2019). Quarterly report on European gas markets. Brussels: European Commission.
  • European Federation of Energy Traders. (2019). European gas hub study. Retrieved from https://efet.org/
  • Fulwood, M. (2019). LNG supply/demand balances, 2018-20205: Is there a problem? Oxford Energy Forum, (119), 4-7.
  • Gringas, A. (2017). The new geopolitics of natural gas. London: Harvard University Press.
  • Hartley, P. (2015). The Future of Long-term LNG Contracts. The Energy Journal, 36(2).
  • Herberg, M. (2011). Natural gas in Asia: history and prospects. Jakarta: Pacific Energy Summit. Retrieved from https://www.australiachinarelations.org
  • Hulshof, D., van der Maat, J. P., and Mulder, M. (2016). Market fundamentals, competition and naturalgas prices. Energy Policy, 94, 480-491.
  • International Group of Liquefied Natural Gas Importers. (2019a). LNG Markets & Trade. LNG Trade. Retrieved from https://giignl.org
  • International Group of Liquefied Natural Gas Importers. (2019b). The LNG industry. GIIGNL Annual Report 2019. Retrieved from https://giignl.org/
  • Janusz, P., Kaliski, M., and Szurlej, A. (2015). The ‘shale gas revolution’ and changes on the LNG market. Gospodarka Surowcami Mineralnymi, 31(3), 5-24.
  • Juris, A. (1998). Development of competitive natural gas markets in the United States. Washington DC: The World Bank.
  • Lai, G., Wang, M. X., Kerke, S., and Scheller-Wolf, A. (2011). Valuation of storage at a liquefied natural gas terminal. Operations Research, 59(3), 602-616.
  • Melling, A. J. (2010). Natural gas pricing and its future. Europe as the battleground. Washington DC: Carnegie Endowment for International Peace.
  • Nalley, S. (2019). U.S. natural gas outlook. Retrieved from https://www.eia.gov
  • Neumann, A., and von Hirschausen, C. (2004). Less long-term gas to Europe? A quantitative analysis of European long-term gas supply contracts. Zeitschrift für Energiewirtschaft, 28(3), 175-182.
  • Osel, H. A. (2019). Natural gas: economics and environment. Australia: Aurora House.
  • Patten, A., and Thomson, P. (2017). LNG trading. In P. Griffin (ed.) Liquefied natural gas: the law and business of LNG. Surrey: Globe Law and Business Ltd.
  • Posner, R. A. (1968). Natural Monopoly and its Regulation. 21 Stanford Law Review, 548-643.
  • Price, C. W., and Bennett, M. (1999). New gas in old pipes: opening the UK residential gas market to competition. Utilities Policy, (8), 1-15.
  • Qadrdan, M., Abeysekera, M., Wu, J., Jenkins, N., and Winter, B. (2020). The Future of Gas Networks. The Role of Gas Networks in a Low Carbon Energy System. Switzerland: Springer.
  • Rogers, H. (2018). The LNG Shipping Forecast: costs rebounding, outlook uncertain. Oxford Energy Insight, (27), 1-18.
  • Rogers, H. V., and Stern, J. (2014). Challenges to JCC pricing in Asian LNG Markets. Oxford: Oxford Institute for Energy Studies.
  • Scherer, M. (ed.). (2018). International arbitration in the energy sector. Oxford: Oxford University Press.
  • Shi, X., and Variam, H. M. P. (2016). Gas and LNG trading hubs, hub indexation and destination flexibility in East Asia. Energy Policy, (96), 587-596.
  • Stern, J., and Rogers, H. V. (2011). The transition to hub-base gas pricing in continental Europe. Oxford: Oxford Institute for Energy Studies.
  • Steuer, C. (2019). Outlook for competitive LNG supply. Oxford: Oxford Institute for Energy Studies.
  • Talus, K. (2018). Model diversion clause for LNG sale and purchase contracts. Retrieved from https://www.jurists.co.jp
  • Thomas, S. (2003). Gas as Commodity. The UK gas market: from nationalism to the embrace of the free market. National Reforms in European Gas, 181-211.
  • Thomson Reuters Eikon. (2019). Database. Retrieved from https://eikon.thomsonreuters.com
  • Timera Energy. (2018). Deconstructing LNG shipping costs. Retrieved from https://timera-energy.com
  • Trinomics, European Commission. (2018). Study on energy prices, costs and subsidiaries and their impact on industry and households. Final report. Retrieved from https://ec.europa.eu
  • Xunpeng, S. (2017). Gas and LNG pricing and trading hub in East Asia: An introduction. Natural Gas Industry B, (3), 352-356.
  • Zhang, D., Shi, M., and Shi, X. (2018). Oil indexation, market fundamentals, and natural gas prices: An investigation of the Asian premium in natural gas trade. Energy Economics, (69), 33-41.
Document Type
Publication order reference
Identifiers
YADDA identifier
bwmeta1.element.desklight-d72eb7c3-ab03-4068-bae0-2a5e8eeff904
JavaScript is turned off in your web browser. Turn it on to take full advantage of this site, then refresh the page.