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Swing Suppliers and International Natural Gas Market Integration

Author

Listed:
  • Sang-Hyun Kim

    (SK E&S Co., Ltd., Seoul 03188, Korea)

  • Yeon-Yi Lim

    (Department of Economics, Soongsil University, Seoul 06978, Korea)

  • Dae-Wook Kim

    (Department of Economics, Soongsil University, Seoul 06978, Korea)

  • Man-Keun Kim

    (Department of Applied Economics, Utah State University, Logan, UT 84322-4835, USA)

Abstract

This study explores the international natural gas market integration using the Engle–Granger cointegration and error correction model. Previous studies have suggested that liquefied natural gas (LNG) and oil-linked pricing with a long-term contract have played key roles in gas market integration, especially between European and Asian markets. There is, however, little discussion of the role of the emergence of a swing supplier. A swing supplier, e.g., Qatar or Russia, is flexible to unexpected changes in supply and demand in both European and Asian markets and adapts the gas production/exports swiftly to meet the changes in the markets. Qatar has been a swing supplier since 2005 in the global natural gas market. In 2009, Qatar’s global LNG export share reached above 30% and has remained around 25% since then. Empirical results indirectly support that the emergence of a swing supplier may tighten market integration between Europe and Asia. The swing supplier may have accelerated the degree of market integration as well, particularly after 2009.

Suggested Citation

  • Sang-Hyun Kim & Yeon-Yi Lim & Dae-Wook Kim & Man-Keun Kim, 2020. "Swing Suppliers and International Natural Gas Market Integration," Energies, MDPI, vol. 13(18), pages 1-12, September.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:18:p:4661-:d:410305
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    References listed on IDEAS

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