Although Asia will benefit from the shale oil revolution, it is important that the market is restructured to deliver a fairer and more transparent pricing system. This demand for transparent gas pricing in Asia came from officials at the Gastech 2014 conference in Seoul, South Korea.
Sheng Chung Lin, chairman of CPC Corporation, commented: "The price of energy has escalated 170% in the last five years for major Asian buyers. Ensuring a stable supply at a reasonable price is a critical concern. The 'Asia premium' has become a hot topic."
Panelists at a session titled Strategies for securing Asia’s future gas demand, called for shorter-term, more flexible energy contracts and less stringent regulation of the global natural gas industry. They also pointed out that the region needs stronger national policy support for natural gas investments, in order to make imports of natural gas more affordable for Asia.
While Asia is paying higher prices for natural gas and LNG, it should in fact be benefiting from the discovery of new sources of gas supplies to meet strong demand in the region.
Supplies from Australia, East Africa, North America, Russia and Indonesia should increase over the next few years, which could change the pricing framework, explained Hirobumi Kiwano, President of JOGMEC.
Gas price indexes
Shigeru Muraki, CEO of Energy Solutions for Tokyo Gas Company, concluded the debate by saying that the creation of Asian gas trading hubs in Korea, Japan and Singapore should help establish “rational and reasonable” market-based price indexes for gas.
Adapted from press release by Katie Woodward
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