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A minimal simplified model for assessing and devising global LNG equilibrium trade portfolios while maximizing energy security

Hamza J. Magnier and Asmaa Jrad

Energy, 2019, vol. 173, issue C, 1221-1233

Abstract: The global environmental concerns associated with the increased energy demand have promoted the use of natural gas as a low-carbon fuel. This caused an increase in LNG supply and demand coupled with the need for useful tools to devise secure LNG trade schemes. While most studies focused either on assessing the security of past/current LNG trade, or on extrapolating LNG trade trends in the future, this study introduces a new simplified coarse-grained model that devises optimized LNG import/export schemes ensuring secure trade for suppliers and markets. The model is based only on four variables: LNG demand, LNG liquefaction capacity, utilization of liquefaction capacity, and transport distance. First, the model was used to generate LNG trade portfolios for Asia Pacific and Europe between 2003 and 2016. The HHI index then showed that the model always devised a more diversified, secure LNG trade. The different import strategies of the two markets and their evolution with time was highlighted, revealing more secure import regulations by AP. Finally, the model was used to forecast LNG import portfolios for AP and EU in 2030, which emphasized a significant change in the market share of conventional exporters with the introduction of new US and Australian LNG.

Keywords: LNG trade movement; Energy security; Trade portfolio; Natural gas; Trade forecasting; Strategic energy use (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:energy:v:173:y:2019:i:c:p:1221-1233