Value of long-term LNG contracts: A theoretical and empirical study
With the rapid development of short-term and spot trade of liquefied natural gas (LNG), the natural gas market is gradually evolving from regionalization to globalization. At the same time, the existence and rationality of long-term LNG contracts have become increasingly controversial. To explore th...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
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Frontiers Media S.A.
2023-01-01
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| Series: | Frontiers in Earth Science |
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| Online Access: | https://www.frontiersin.org/articles/10.3389/feart.2022.1058592/full |
| _version_ | 1797960103856439296 |
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| author | Xiaoning Xia Xiaoning Xia Rui Wu Yan Liu Jinzhou Wu Tiankuo Lu |
| author_facet | Xiaoning Xia Xiaoning Xia Rui Wu Yan Liu Jinzhou Wu Tiankuo Lu |
| author_sort | Xiaoning Xia |
| collection | DOAJ |
| description | With the rapid development of short-term and spot trade of liquefied natural gas (LNG), the natural gas market is gradually evolving from regionalization to globalization. At the same time, the existence and rationality of long-term LNG contracts have become increasingly controversial. To explore the value of long-term LNG contracts in the process of natural gas market globalization, this article constructs a two-stage game model and applies China’s LNG trade data in 2018 to the model. The study shows that, compared with complete import of short-term LNG, even if the long-term LNG contracts do not have price advantages, importing an appropriate amount of long-term LNG may help to increase the total LNG imports, reduce the price of LNG, and thus improve import benefits. Besides, a moderate amount of long-term LNG contracts is conducive to the establishment of a stable and flexible natural gas supply system and the security of natural gas imports. Therefore, natural gas importers should not underestimate or even ignore the value of long-term LNG contracts while actively participating in short-term and spot trade of natural gas. |
| first_indexed | 2024-04-11T00:40:09Z |
| format | Article |
| id | doaj.art-4faad664daec41efbd32269f49778db2 |
| institution | Directory Open Access Journal |
| issn | 2296-6463 |
| language | English |
| last_indexed | 2024-04-11T00:40:09Z |
| publishDate | 2023-01-01 |
| publisher | Frontiers Media S.A. |
| record_format | Article |
| series | Frontiers in Earth Science |
| spelling | doaj.art-4faad664daec41efbd32269f49778db22023-01-06T06:33:42ZengFrontiers Media S.A.Frontiers in Earth Science2296-64632023-01-011010.3389/feart.2022.10585921058592Value of long-term LNG contracts: A theoretical and empirical studyXiaoning Xia0Xiaoning Xia1Rui Wu2Yan Liu3Jinzhou Wu4Tiankuo Lu5School of Economics and Business Administration, Chongqing University, Chongqing,ChinaDepartment of Materials and Production, Aalborg University, Aalborg, DenmarkSchool of Economics and Business Administration, Chongqing University, Chongqing,ChinaSchool of Management Science and Real Estate, Chongqing University, Chongqing, ChinaSchool of Intelligent Technology and Engineering, Chongqing University of Science and Technology, Chongqing, ChinaSchool of Economics and Business Administration, Chongqing University, Chongqing,ChinaWith the rapid development of short-term and spot trade of liquefied natural gas (LNG), the natural gas market is gradually evolving from regionalization to globalization. At the same time, the existence and rationality of long-term LNG contracts have become increasingly controversial. To explore the value of long-term LNG contracts in the process of natural gas market globalization, this article constructs a two-stage game model and applies China’s LNG trade data in 2018 to the model. The study shows that, compared with complete import of short-term LNG, even if the long-term LNG contracts do not have price advantages, importing an appropriate amount of long-term LNG may help to increase the total LNG imports, reduce the price of LNG, and thus improve import benefits. Besides, a moderate amount of long-term LNG contracts is conducive to the establishment of a stable and flexible natural gas supply system and the security of natural gas imports. Therefore, natural gas importers should not underestimate or even ignore the value of long-term LNG contracts while actively participating in short-term and spot trade of natural gas.https://www.frontiersin.org/articles/10.3389/feart.2022.1058592/fullnatural gas marketLNG tradelong-term contractsshort-term contractstwo-stage game |
| spellingShingle | Xiaoning Xia Xiaoning Xia Rui Wu Yan Liu Jinzhou Wu Tiankuo Lu Value of long-term LNG contracts: A theoretical and empirical study Frontiers in Earth Science natural gas market LNG trade long-term contracts short-term contracts two-stage game |
| title | Value of long-term LNG contracts: A theoretical and empirical study |
| title_full | Value of long-term LNG contracts: A theoretical and empirical study |
| title_fullStr | Value of long-term LNG contracts: A theoretical and empirical study |
| title_full_unstemmed | Value of long-term LNG contracts: A theoretical and empirical study |
| title_short | Value of long-term LNG contracts: A theoretical and empirical study |
| title_sort | value of long term lng contracts a theoretical and empirical study |
| topic | natural gas market LNG trade long-term contracts short-term contracts two-stage game |
| url | https://www.frontiersin.org/articles/10.3389/feart.2022.1058592/full |
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