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    Global LNG Pricing Terms and Revisions: An Empirical Analysis

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    Author
    Agerton, Mark
    Date
    2015
    Abstract
    Asian long-term contracts for liquefied natural gas (LNG) are generally thought to index LNG prices to oil prices. This should mean that LNG and oil prices are cointegrated. However, statistical evidence for cointegration using Japanese data is not strong. To resolve this puzzle, I examine 16 Japanese, South Korean, Taiwanese, and Spanish LNG import price series and allow for multiple, unknown structural breaks in the relationship to oil prices. This resolves the puzzle, and I provide estimates for the timing of breaks and the underlying average pricing terms. I relate these to count, volume, and duration data on long-term contracts and discuss how to interpret econometric estimates in light of contract data. This paper complements existing work on global gas market integration, which largely ignores how discrete changes in oil-indexed long-term contracts will affect empirical relationships.
    Citation
    Agerton, Mark. "Global LNG Pricing Terms and Revisions: An Empirical Analysis." (2015) James A. Baker III Institute for Public Policy: http://bakerinstitute.org/research/global-lng-pricing-terms-and-revisions/.
    Keyword
    LNG prices; long-term contracts; structural breaks; cointegration
    Type
    Working paper
    Publisher
    James A. Baker III Institute for Public Policy
    Citable link to this page
    https://hdl.handle.net/1911/91264
    Link to related resources
    http://bakerinstitute.org/research/global-lng-pricing-terms-and-revisions/
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    Home | FAQ | Contact Us | Privacy Notice | Accessibility Statement
    Managed by the Digital Scholarship Services at Fondren Library, Rice University
    Physical Address: 6100 Main Street, Houston, Texas 77005
    Mailing Address: MS-44, P.O.BOX 1892, Houston, Texas 77251-1892
    Site Map