워싱턴센터

워싱턴센터
HOME > 워싱턴센터
제   목 [NBR] NASCENT GAS MARKETS IN THE ERA OF LOW OIL PRICES
작성자 EGS
작성일 2017/07/06 조회수 110
파일첨부  workingpaper_Kim_062917.pdf

 

NASCENT GAS MARKETS IN THE ERA OF LOW OIL PRICES

The Challenges and Opportunities for Energy Security in Northeast Asia

 

 

Younkyoo Kim 
Hanyang University

 

 

 

EXECUTIVE SUMMARY

This paper examines the impact of low oil prices on the natural gas and liquefied natural gas (LNG) market in Asia and explores the market and policy conditions necessary to develop a regional trading hub.

Main Argument

At end of February 2016, the first exports of LNG from the U.S. mainland were shipped when the major shale gas company Cheniere Energy's LNG cargo left the Sabine Pass terminal in Texas. The potential large-scale entry of U.S. LNG exports into Asian markets may trigger flexible trading. Northeast Asia needs to continue its effort to promote regional cooperation and co-prosperity by building a Northeast Asian gas trading hub. Russia will seek to keep U.S. LNG in check through price negotiations. The evolution of an Asian gas hub will be influenced to a great extent by how Russia and China reconsider their energy strategies.

 

Policy Implications

·         President Moon Jae-in's plan to reduce South Korea's use of coal and nuclear power could increase annual LNG consumption by 8 million tons more than previously anticipated, thereby heightening reliance on imports.

·         As demand rises, natural gas and LNG supplies from the U.S., Australia, Russia, East Africa, and the Middle East will play an increasingly important role for countries in Asia that seek to improve supply diversification.

·         The abundance of Australian and U.S. LNG will continue to exert downward pressure on Asian prices, which will likely encourage Northeast Asian buyers to seek out the most competitively priced cargoes.

·         To establish a successful wholesale market and trading hub in Asia, countries in the region need to liberalize key economic sectors and ensure third-party access, supply competition, and deregulated gas prices.

 

 

 

About the Author

Younkyoo Kim is Professor in the Division of International Studies and Director of the Center for Energy Governance and Security at Hanyang University.
 

This working paper is part of a series of papers released as a collaboration between NBR and the Center for Energy Governance and Security (EGS) of Hanyang University.

이전글  
다음글  [NBR] Russia’s “Pivot to Asia”: The Multilateral Dimension