COMPARATIVE ANALYSIS OF HISTORIC PREDICTIONS AND ACTUAL GLOBAL NATURAL GAS MARKET TRENDS FOR THE PERIOD FROM 1997 TO 2020

An accurate prediction of energy indicators is critical for orientation in the energy market, and it could give direction for policymakers and market participants. The aim of this research was to examine the accuracy of projections of natural gas market indicators. This paper presents a comparative analysis of historic predictions and actual global natural gas movements in several segments, namely production, consumption, and regional import dependence, as well as forecasted and actual price movements. The goal of this paper is to compare projected and actual natural gas market indicators. Predictions of market movements 20 years into the future are very useful, but they do have certain limitations. Those limitations especially apply to goods whose prices are regional and linked to price movements of another good, as is the case with natural gas. External influences have a direct impact on production and consumption, and it is rather clear that changes in one of the fundamental factors entails and magnifies the error of further predictions. Despite that, predictions of global production and consumption have proven to be very accurate. Based on the research results, it could be emphasized that for strategical planning and policy-making purposes, the predictions of natural gas production, consumption, or even import independence could be considered with great certainty, while price assumptions in the case of natural gas have shown significant mismatching, therefore, should be very carefully perceived.

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Swing Suppliers and International Natural Gas Market Integration

Energies ◽

10.3390/en13184661 ◽

2020 ◽

Vol 13 (18) ◽

pp. 4661

Author(s):

Sang-Hyun Kim ◽

Yeon-Yi Lim ◽

Dae-Wook Kim ◽

Man-Keun Kim

Keyword(s):

Natural Gas ◽

Market Integration ◽

Supply And Demand ◽

Gas Production ◽

Correction Model ◽

Natural Gas Market ◽

Term Contract ◽

Gas Market

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.

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The debt crisis on Ukraine’s natural gas market and ways to solve it

Economy and Forecasting ◽

10.15407/econforecast2021.01.025 ◽

2021 ◽

Vol 2021 (1) ◽

pp. 25-37

Author(s):

Roman Yukhymets ◽

◽

Keyword(s):

Natural Gas ◽

Institutional Environment ◽

Debt Crisis ◽

Market Failures ◽

Gas Distribution ◽

Natural Gas Market ◽

Market Participants ◽

International Obligations ◽

Gas Market ◽

Gas Supply

The article considers the main reasons that have led to the debt crisis in the natural gas market of Ukraine due to the accumulation of debt from gas supply and gas distribution companies. The purpose of the study is to identify the main prerequisites for the formation of debt in different segments du-ring the reform of the natural gas market through partial implementation of the requirements of European energy legislation. Having chosen the European vector of development Ukraine is interested in meeting the requirements of European policy within the framework of its international obligations and aspirations for European integration. This necessitates adaptation of the national institutional environment to the basic requirements of the Second and Third energy packages. According to the existing international obligations, the national natural gas market is undergoing significant changes towards liberalization and development of competitive environment. However, in the segment of retail market and supply of natural gas to household consumers for a long time the necessary changes in the institutional environment did not occur or temporary decisions were made, which did not contribute to solving the sector’s crisis, but only froze the existing model of relationships between various market participants. Reluctance to implement unpopular solutions in the supply of natural gas to household consumers and attempts to shift the increase in the cost of gas supply tariffs for the needs of the household consumers to other categories of consumers led to a constant redistribution of monopolistic influence and accumulation of significant debt between market participants. The article analyzes the causes of debt between various participants in the retail segment of the natural gas market, which makes it possible to identify the main factors of such debt. These factors include: the lack of a sufficient level of transparency in the tariff for natural gas supply and transportation services; the absence of a 100% accounting for various categories of consumers, which makes it necessary to establish consumption standards, which later become the object of significant abuse; the existing model of public service obligations, which, given the significant redistribution of natural gas, results in significant market distortions; and the imperfect approach to calculating the costs of gas distribution companies in terms of temperature coefficients in the tariff, provided that gas metering exists not in energy units, but in cubic meters. Based on the results obtained in the article, the author sets forwards various recommendations for the implementation of measures, whose main content is to eliminate the institutional prerequisites that lead to the risks of market failures, which may cause debt.

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The debt crisis on Ukraine’s natural gas market and ways to solve it

Ekonomìka ì prognozuvannâ ◽

10.15407/eip2021.01.032 ◽

2021 ◽

Vol 2021 (1) ◽

pp. 32-48

Author(s):

Roman Yukhymets ◽

◽

Keyword(s):

Natural Gas ◽

Institutional Environment ◽

Debt Crisis ◽

Market Failures ◽

Gas Distribution ◽

Natural Gas Market ◽

Market Participants ◽

International Obligations ◽

Gas Market ◽

Gas Supply

The article considers the main reasons that have led to the debt crisis in the natural gas market of Ukraine due to the accumulation of debt from gas supply and gas distribution companies. The purpose of the study is to identify the main prerequisites for the formation of debt in different segments during the reform of the natural gas market through partial implementation of the requirements of European energy legislation. Having chosen the European vector of development Ukraine is interested in meeting the requirements of European policy within the framework of its international obligations and aspirations for European integration. This necessitates adaptation of the national institutional environment to the basic requirements of the Second and Third energy packages. According to the existing international obligations, the national natural gas market is undergoing significant changes towards liberalization and development of competitive environment. However, in the segment of retail market and supply of natural gas to household consumers for a long time the necessary changes in the institutional environment did not occur or temporary decisions were made, which did not contribute to solving the sector’s crisis, but only froze the existing model of relationships between various market participants. Reluctance to implement unpopular solutions in the supply of natural gas to household consumers and attempts to shift the increase in the cost of gas supply tariffs for the needs of the household consumers to other categories of consumers led to a constant redistribution of monopolistic influence and accumulation of significant debt between market participants. The article analyzes the causes of debt between various participants in the retail segment of the natural gas market, which makes it possible to identify the main factors of such debt. These factors include: the lack of a sufficient level of transparency in the tariff for natural gas supply and transportation services; the absence of a 100% accounting for various categories of consumers, which makes it necessary to establish consumption standards, which later become the object of significant abuse; the existing model of public service obligations, which, given the significant redistribution of natural gas, results in significant market distortions; and the imperfect approach to calculating the costs of gas distribution companies in terms of temperature coefficients in the tariff, provided that gas metering exists not in energy units, but in cubic meters. Based on the results obtained in the article, the author sets forwards various recommendations for the implementation of measures, whose main content is to eliminate the institutional prerequisites that lead to the risks of market failures, which may cause debt.

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