Gas Pricing System in the Asian Pacific Market: Influence of Europe and USA

摘要

Gas pricing system for international trade has specific characteristics. Gas price is decided by several different pricing mechanisms and as gas market is regionalized and there is no such thing as global gas market, gas prices vary in each different region. Gas price for international trades in the Asia Pacific market are linked to average custom cleared import prices of crude oil into Japan and this pricing mechanism is called JCC pricing system.1 Crude oil and oil product indexation gas pricing systems are one of the most established gas pricing systems that has been used for decades. Oil indexation pricing system first invented and started to be used by Netherlands in 60’s. In Asia, JCC indexation system was first used for LNG contracts for Japanese companies and afterwards, JCC pricing was adopted by other Asian companies for LNG trades. JCC pricing is dominant gas pricing system in the Asia Pacific region.