Asia in need for Nat Gas trading hubs

The Asia region is in need of Nat Gas trading hubs to provide an alternative to Crude Oil-linked imports amid the rising volume of Nat Gas consumption and trade here, Maria van der Hoeven, chief of the International Energy Agency (IEA), said at the Singapore International Energy Week Monday.

Singapore has the potential to develop to a Nat Gas trading hub relying on its “Key location, experience with Crude Oil trading, and advanced institutional development,” she said, adding that “other hubs, particularly in China, may in the future provide liquidity on a greater scale.”

The IEA’s Medium-Term Gas Market report released this June said that the agency expected liquefied natural gas (LNG) trade would grow by 17% to 3.94-T cubic metres by Y 2017 from Y 2011. In particular, Asia is the second largest Nat Gas consuming region.

There is a considerable price gap in this region, which requires appropriate Nat Gas pricing.

Ms. Hoeven raised the example of their research, showing that Japan imported LNG at US$18 per million British Thermal units (Mbtu) this Summer, compared to US$3 per Mbtu prices in the US, and 10 to 12 US $’s in Europe.

“Europe is responding by developing Gas-to-Gas pricing on trading hubs, with some progress in the UK and on the Continent,” Ms. Hoeven said, “but Asia is lagging.”

She urged the policy makers in this region to establish wholesale natural gas markets with functioning spot markets.

When talking about the outlook expectation, Ms. Hoeven said “I am cautiously optimistic that the slowdown we see in the largest emerging markets is relatively planned, and that the landing will be soft, but it shrouds the outlook for the energy economy.”

Indeed, “problems in the developed markets are now having a visible effect on Asian growth,” she added.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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