Swing Suppliers and International Natural Gas Market Integration
Abstract
:1. Introduction
2. Overview of Global Natural Gas Market
3. Methodology and Analyses
3.1. Data
3.2. Dividing Sample Period
- Period 1: The period between January 2000 and August 2005 which represents the classic natural gas market; i.e., there is no swing supplier in the market. Qatar’s global market share is around 10–14%.
- Period 2: The period between September 2005 and December 2008; Qatar’s global LNG market share increased by close to 20% and begun exporting LNG to both European and Asian markets. Qatar is considered as a swing supplier in this period.
- Period 3: The period between January 2009 and March 2011; Qatargas (world’s largest LNG company in Qatar) and RasGas (second-largest LNG producer in Qatar, which merged with Qatargas in 2018) inaugurated two mega LNG trains; Qatar’s global share increased to above 30%. In addition, China began importing natural gas from Russia by pipeline (6 bcm in 2009 which increased to 17 bcm in 2010 and 29 bcm in 2011, respectively) (BP Statistical Review of World Energy).
- Period 4: The period between April 2011 and December 2016; Qatar’s LNG exports to the Asian market increased substantially following the 2011 Great East Japan earthquake; the price parity between European and Asian markets started expanding (Figure 2) in this period. In period 4, Qatar increased short-term contracts up to 24% to satisfy LNG gas import by Japan [19]. Quart’s gas exports averaged around 96 bcm per year in this period. Russia exported more than 40 bcm of natural gas per year during this period (BP Statistical Review of World Energy). Qatar’s global share remained around 30%.
- Period 5: The period between January 2017 and December 2019; the global gas market was stabilized during the period. Price parity between JKM and NBP was narrowed. Qatar’s LNG exports to the Asian market decreased by 5% (91 bcm per year) compared to the period 4, but the market share remained around 30%. Natural gas from Russia to the Asian market kept increasing to more than 60 bcm in 2018 and 2019. In this period, U.S. shale gas production and exports increased substantially. According to the U.S. Energy Information Administration (EIA), U.S. LNG exports to the Asian market were expanded to 9 bcm in 2017, 15 bcm in 2018, and 18 bcm in 2019 from around 0.5 bcm during 2012–2015. Total U.S. exports were less than 1 bcm till 2015, but they increased to 5 bcm in 2016, 20 bcm in 2017, 31 bcm in 2018 and 52 bcm in 2019. U.S. shale gas production and exports in this period might change the fundamentals of the global natural gas market.
3.3. Unit Root Test
3.4. Cointegration Test
3.5. Error Correction Model
4. Conclusions and Implications
Author Contributions
Funding
Conflicts of Interest
References
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Price | Obs | Mean | Std. Dev. | Min | Max |
---|---|---|---|---|---|
JKM | 240 | 8.46 | 4.08 | 3.95 | 19.22 |
HHB | 240 | 4.59 | 2.16 | 1.81 | 13.42 |
NBP | 240 | 6.49 | 2.90 | 1.75 | 15.98 |
MZα | MSB | MZt | t stat | |
---|---|---|---|---|
JKM | −11.360 | 0.202 | −2.298 | −2.174 |
(−24.079) | (0.142) | (−3.440) | (−3.147) | |
[NS] a | [NS] | [NS] | [NS] | |
HHB | −26.523 | 0.136 | −3.618 | −3.729 |
(−28.793) | (0.132) | (−3.792) | (−4.074) | |
[NS] | [NS] | [NS] | [NS] | |
NBP | −24.314 | 0.142 | −3.452 | −3.005 |
(−25.486) | (0.139) | (−3.515) | (−3.362) | |
[NS] | [NS] | [NS] | [NS] |
Price Pairs | Period 1 | Period 2 | Period 3 | Period 4 | Entire Period | |
---|---|---|---|---|---|---|
2000 M1 | 2005 M9 | 2009 M1 | 2011 M4 | 2000 M1–2016 M12 | ||
–2005 M8 | –2008 M12 | –2011 M3 | –2016 M12 | E–G | G–H | |
JKM-NBP | ||||||
JKM-HHB | ||||||
NBP-HHB |
Parameters | Period 1 | Period 2 | Period 3 | Period 4 | Entire Period |
---|---|---|---|---|---|
2000 M1 | 2005 M9 | 2009 M1 | 2011 M4 | 2000 M1 | |
–2005 M8 | –2008 M12 | –2011 M3 | –2016 M12 | –2016 M12 | |
(0.037) | (0.049) | (0.142) | (0.170) | (0.065) | |
(0.051) | (0.040) | (0.139) | (0.186) | (0.029) | |
(0.141) | (1.144) | (0.588) | (0.648) | (0.482) | |
(0.036) | (0.122) | (0.094) | (0.082) | (0.092) | |
Instant % | 8.6% | 7.9% | |||
(10.0%) | (12.9%) | (11.7%) | (8.9%) | (5.4%) | |
Adj R2 | 0.03 | −0.04 | 0.34 | 0.37 | 0.09 |
F-stat | 2.15 | 0.22 | 7.67 | 21.22 | 11.06 |
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Kim, S.-H.; Lim, Y.-Y.; Kim, D.-W.; Kim, M.-K. Swing Suppliers and International Natural Gas Market Integration. Energies 2020, 13, 4661. https://doi.org/10.3390/en13184661
Kim S-H, Lim Y-Y, Kim D-W, Kim M-K. Swing Suppliers and International Natural Gas Market Integration. Energies. 2020; 13(18):4661. https://doi.org/10.3390/en13184661
Chicago/Turabian StyleKim, Sang-Hyun, Yeon-Yi Lim, Dae-Wook Kim, and Man-Keun Kim. 2020. "Swing Suppliers and International Natural Gas Market Integration" Energies 13, no. 18: 4661. https://doi.org/10.3390/en13184661