Vitalization of natural gas market in East Asia

A competitive gas-to-gas trading market has yet to emerge in Asia. Yet in spite of the various barriers and restrictions, the trend of liberalization seems to inevitable. How a natural gas trading market just might develop in East Asia is what this thesis explains and predicts. Moreover, it lays out what the preconditions for the changes are, and what the costs and benefits from such changes may be. Considering Asia’s current market situation, the wholesale competition model could be a practical option for Asia’s gas markets. A critical role in building up the gas-to-gas trading market will be played by China. In the first stage of market liberalization, China alone can be expected to form its own trading hub on its east coast, say in Shanghai. If the transactions of the trading hub work smoothly and the set prices lower than oil-linked gas prices, then other gas-importing countries would likely join the trading hub by interconnecting with a physical pipeline.