Swing Suppliers and International Natural Gas Market Integration

Sang-Hyun Kim, Yeon-Yi Lim, Dae-Wook Kim and Man-Keun Kim
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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

Energies, 2020, vol. 13, issue 18, 1-12

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.

Keywords: Engle–Granger error correction; natural gas; market integration; swing supplier; Qatar (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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