Amid the Asia-Pacific regions growing reliance on imports, a report from the International Energy Agency (IEA) identifies obstacles and opportunities for establishing a gas market that reflects supply/demand fundamentals. Asia-Pacific is expected to become the worlds second-largest gas market by 2015. And yet this market is dominated by long-term contracts in which the price of gas is linked, or indexed, to that of oil. In recent years, this has helped keep Asian gas prices much higher than those in other parts of the world (Fig. 1), leading to serious questions about the sustainability of the system and its effects on Asian competitiveness.
| FIG. 1. Relatively high gas prices lead to |
a competitive burden on Asian economies.