Platts: GASTECH 2014: Asian gas markets face Europe's dilemma

Gas buyers in Asia are facing the same problems of high prices and a monopolistic market that their counterparts in Europe faced a decade or so ago, but there is no equivalent regulatory body that can force suppliers to change their practices, delegates at the Gastech 2014 conference in Goyang, South Korea, heard this week.

Oil indexation in pricing clauses and bans on redelivery of cargoes in Asia mean that buyers are paying a price for liquefied natural gas that can only coincidentally reflect gas supply and demand, and they may not exchange cargoes between themselves as a means of mutually balancing their respective positions.

The chairman of state-owned importer Korea Gas Corp, Seok-hyo Jang, said one challenge was to make LNG supply economic and competitive, while the South Korean energy minister Yoon Sang-Jick said that Northeast Asia was hindered by an inflexible pricing system. Gas had to be allowed to be traded more freely, and oil indexation and destination clauses were the two biggest obstacles.

"We need suppliers and consumer nations to work together to create more opportunities for future development," the minister said.  MORE