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