Development of Europe's gas hubs: Implications for East Asia

Elsevier BV
Publication Type:
Journal Article
Natural Gas Industry B, 2016, 3, (4), pp. 357-366
Issue Date:
Full metadata record
Gas trading hubs have been initially developed in the US in 1980s, UK in 1990s, more recently in European in the 2000s and mulled in East Asia now. Due to its freshness and diversification in nationality, governance and culture, the European hub experience can offer valuable lessons for East Asia. This paper seeks to advance understanding of gas hub development in Europe and provide lessons for East Asia. The European experience highlights that market liberalization and transition of gas pricing mechanism are necessary in creating the competitive markets that are needed for functional gas hubs. Political will and regulations further safeguard the competition environment needed for hub development. Natural factors, such as significant domestic production and culture could have a significant impact on the hub development and transition of pricing mechanism. In East Asia, the path to gas trading hubs might be more difficult than in Europe but a growing market creates an opportunity to start new terms with new contracts. Nevertheless, East Asian needs to work hard to development its indigenous gas or LNG trading hubs.
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