Vulnerability of Natural Gas Supply in the Asian Gas Market

Helen Cabalu and Chassty Manuhutu ()
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Chassty Manuhutu: Curtin University of Technology, GPO Box U1987, Perth, Western Australia 6845,

Economic Analysis and Policy, 2009, vol. 39, issue 2, 255-270

Abstract: Gas supply interruptions, increasing gas prices, transportation and distribution bottlenecks, and a growing reliance on imports over longer distances have renewed interest on gas vulnerability in Asia. Japan, Korea and Taiwan are heavily reliant on LNG imports for their gas supplies from Malaysia, Brunei, Indonesia, Australia and the Middle East. Countries like Malaysia, Thailand and Singapore import gas via trans-border pipelines. This paper examines the relative vulnerability of eight gas-importing countries in Asia for the year 2006 using four market risk indicators (ratio of value of gas imports to GDP; ratio of gas consumed to GDP; ratio of gas consumed in an economy to population; and ratio of gas consumption to total primary energy consumption) and two supply risk indicators (ratio of domestic gas production to total domestic gas consumption and geopolitical risk). Using principal component analysis, a composite index of gas vulnerability is estimated by combining the individual indicators. The results demonstrate that there are significant differences in the values of individual and overall indicators of gas vulnerability among countries. This implies that policy measures to address gas vulnerability in one country could differ in another country.

Keywords: Natural gas; vulnerability; Asia (search for similar items in EconPapers)
JEL-codes: Q41 Q43 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (7)

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