Full Title: Challenges to JCC Pricing in Asian LNG Markets
Author(s): Howard V Rogers and Jonathan Stern
Publisher(s): The Oxford Institute for Energy Studies
Publication Date: 2/2014


Research by the OIES gas programme over the past several years has argued that natural gas pricing is in transition worldwide. In almost every country and every long term international gas contract the commercial status quo – usually established many decades ago when energy and gas markets looked very different – is in the process of change. Our book on gas pricing1 reviewed different countries and regions showing that:

  • In North America the unravelling of regulatory complexities at a time of supply abundance, and a fragmented and competitive production base, gave rise to a liberalised gas market and the adoption of Henry Hub as the main (but not the only) North American gas trading hub in the late 1980s. The UK, after an aggressive privatisation and liberalisation programme, established the NBP as a reference price in the late 1990s.
  • In Continental Europe a sustained EU policy drive to create a competitive gas market and establish nascent trading hubs began to succeed in the aftermath of the 2008 financial crisis, when a combination of lower demand and a glut of LNG created the ideal conditions for hubs to develop liquidity and to take over as the reference price for gas in north west European markets.