Asian governments must reform their natural gas markets if the region is to see an expansion in liquefied natural gas (LNG) supply to meet its rapidly growing demand, according to a new report from the International Energy Agency (IEA).
The report specifies that limited flexibility and pricing issues are the main challenges to overcome in the development of a more efficient market.
The IEA has previously highlighted the need for more transparent and efficient markets in Asia, where gas prices are four times those in North America – and can be as high as five times in winter – but the issue is becoming more acute as the region’s gas demand rises and as the LNG market becomes increasingly globalised. Some 150 billion cubic metres (bcm) in new LNG supplies, led by several projects in Australia, are expected to become available between now and 2020. In that same period, Asian gas demand is forecast to grow by around 250 bcm.
“The advent of new LNG supplies represents a golden opportunity for Asia, but first the region’s governments must address the rigid and illiquid markets that undermine affordability and accessibility for consumers,” said IEA Executive Director Maria van der Hoeven as she presented the new report, The Asian Quest for LNG in a Globalising Market, at the LNG Producer-Consumer Conference in Tokyo. “For gas to be a sustainable contributor to energy security in the region, Asia must look to reforms.”
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