Natural Gas Market Liberalization Research Articles

Integration of weather forecast and artificial intelligence for a short-term city-scale natural gas consumption prediction

Ruled by the directives and regulations adopted by the European Commission, the European natural gas market is obliged to enable free competition. This process has just started in the Serbian market, and the national natural gas provider (Srbijagas) has started its restructuring. To attain the objective of natural gas market liberalization, it is essential to accurately plan capacities and make precise predictions of future peak consumption at all levels of trade. In this research, an hourly city-scale Adaptive Neuro-Fuzzy Inference System algorithm with the Gaussian membership function is developed for both heating and non-heating regimes. In order to upgrade previous studies in this field, besides standard gas consumption and weather variables, hourly weather forecast and lower calorific value were added to the model. The model output is predicted hour-ahead natural gas consumption. To measure the predicting performance of the two models proposed in this research, the Coefficient of Determination and Mean Absolute Percentage Error were used. For the considered hourly consumption forecast of heating and non-heating models, the Coefficients of Determination were 0.99, while the overall (training, testing and checking) Mean Absolute Percentage Error values were 3.0% and 3.4% respectively. Based on these performance metrics, it can be concluded that for both models, the proposed algorithm resulted in a very satisfactory forecast. An adequate prediction of future natural gas consumption would support all market stakeholders, leading to the development a cleaner and sustainable energy system.

The ‘Changing Same of Power’: State territoriality and natural gas market liberalization in Thailand

Natural gas markets have been traditionally territorialized within the nation-state apparatus. However, since the early 1980s, the territoriality of these markets has been evolving through liberalization, cross-border market integration, and globalization in the form of liquefied natural gas (LNG) trade. These dynamics have materialized unevenly across the global economy. While natural gas market liberalization has been implemented in the United States and Europe, natural gas markets in most Asian countries continue to be firmly controlled by regulated or state-owned natural gas monopolies. This is the case in Thailand, where despite multiple reform efforts since the 1990's, the partially privatized, state-owned natural gas company, PTT Public Company Limited, continues to hold a lucrative monopoly over markets in Thailand. In this article, I explain why natural gas market liberalization in Thailand has failed to materialize by drawing upon an analytical toolkit that includes both territorial and topological notions of power. In doing so, I aim to contribute to geographical studies of energy by demonstrating the different arrangements by which powerful actors may reproduce their authority over energy systems. PTT has historically maintained its reach over natural gas markets through the exclusive yet contested authority of the Thai-state over domestic natural gas resources and infrastructure. However, more recently, this authority has been transformed by LNG imports and the introduction of natural gas sector reforms in Thailand. Nevertheless, I find that PTT continues to reproduce its monopoly in gas markets by quietly working through regulations, contracts, and pricing regimes.

러시아 국내 천연가스 시장의 자유화와 수출 정책 변화의 요인과 양상에 대한 시기별 분석 : 확대된 자원민족주의 개념의 적용과 평가

러시아 국내 천연가스 시장의 자유화와 수출 정책 변화의 요인과 양상에 대한 시기별 분석 : 확대된 자원민족주의 개념의 적용과 평가

Evolving LNG/RLNG Regime in Pakistan and the National Energy Security

With economic growth, the demand for natural gas as a fuel has increased recently, while its supply has seen decrease. The demand is projected to further increase and the country's currently known recoverable indigenous gas reserves are insufficient to meet this demand. Gas shortages have already emerged and shall increase substantially in the following years if indigenous supply is not supplemented through imports. This paper aims to review the regulatory framework of LNG/RLNG for creating enabling environment for import, re-gasification, sale and marketing in Pakistan. The focus of this paper is on the supply side of energy, public and private gas utilities relation with respect to LNG, natural gas market liberalization, and its comparative analysis with other fuel prices. In the short term, without importing LNG to the tune of about 800 - 1.2 MMSCFD, the demand-supply gap of the energy in Pakistan would have been much more than it is today. Irrespective of its price, however, LNG is the only short-term solution in augmenting energy supplies.

The spillover effects across natural gas and oil markets: Based on the VEC–MGARCH framework

Abstract This paper empirically investigates both price and volatility spillover effects in a comprehensive VEC–MGARCH framework. The hedging strategy is further discussed using the spillover effects. Crude oil and natural gas markets of US, Europe and Japan are examined for regional segmentation and different pricing mechanisms of natural gas. Our results show that the European and Japanese gas prices are cointegrated with Brent oil prices, but US gas price is decoupled from oil due to natural gas market liberalization and shale gas expansion. In all cases, the results support the presence of price spillover from crude oil markets to natural gas markets, but a reverse relationship does not exist. The asymmetric price spillover effects might be explained by the relative size of each market. It was also found that the volatility in oil market seems to spillover to the natural gas market, and vice versa, in both US and Europe. On the contrary, volatility seems to be independent in natural gas and oil markets in Japan. The difference in the results of the volatility spillover effects could be explained by the pricing mechanism of natural gas, especially the risk avoidance mechanism in gas pricing in Japan. The risk management performance of hedging strategy is remarkable considering volatility spillover.

Measuring and comparing the performances of energy retail companies

Purpose – In the last decade, the Italian natural gas market has undergone profound changes. The slow ongoing process of liberalization that began in 2000 has produced many changes in the industry as companies have had to react to the new regulatory framework. Many companies have sought agreements, alliances and mergers to consolidate their position in the market, other companies have sought to diversify their product range by becoming multi-utility companies, others, unable to react to the new competitive pressures, have gone bankrupt. The aim of the work is to analyse the performance of natural gas retail companies after the liberalization of the sector. Design/methodology/approach – The authors carry out a financial statement analysis for indexes in order to evaluate business management in terms of the financial, profitability and liquidity aspects. The authors analysed a sample of 111 companies operating in Italy for a six-year period (2004-2009) following the full liberalization of the sector (January 1, 2003). Findings – Results show that many of the firms in the sample are suffering from a reduction in profits and present serious financial weaknesses. In particular, the companies that perform the worst are the small, new entrants and those in the south of Italy. In regard to the new entrants it should be noted that although more than ten years have passed since the beginning of the liberalization process, entry barriers are still present. As regards the business diversification, the best financial and operating results are achieved by large firms, listed companies and those which grew mainly through M&As. Research limitations/implications – Even though there are numerous theoretical and empirical studies on the effects of diversification strategies and M&As, very few researchers have analyzed these effects in the context of a liberalization process of an energy sector. Starting from this gap in the literature, the work aims to analyse the strategies implemented by the Italian companies in the natural gas retail segment. Practical implications – The empirical findings will help the policy makers of Italy in understanding that more than ten years since the beginning of the natural gas market liberalization, entry barriers are still present. Although all consumers have been free to choose their supplier since 2003, the incumbent firms have maintained a dominant position in the market, thanks to a “weak” unbundling (often the incumbent retail operator belongs to the same group as the distribution network operator) and to the advantage in the supply phase by means of a long-term contract with a “take or pay” clause. Originality/value – Italy has always been characterized by the centrality of natural gas in its energy basket and it is the third European country for annual consumption. Despite the importance of this energy source, no substantial work has been done in this regard with reference to Italy.

Russia and the European Union: An Outlook for Collaboration and Competition in European Natural Gas Markets

Abstract: In the aftermath of recent natural gas and oil supply disruptions to European markets, Russia's long-term supply stability and Europe's natural gas market developments are of utmost concern to both the producer and the consumer. As Europe's indigenous supply declines, it will rely more on gas imports. Concurrently, Russia's domestic gas consumption is growing, its infrastructure continues to age, and Gazprom will continue to rely on both Central Asian imports and growth from independent gas producers to meet its long-term supply commitments. This article discusses a medium-term outlook for Russia and the European Union and outlines the barriers that are inhibiting competition and collaboration in the energy sphere. Keywords: competition, energy markets, energy security, European Union, natural gas, oil, Russia ********** In the past year, the security of natural gas supplies has emerged as one of the top issues of concern for countries in Europe, for the European Union (EU) and the North Atlantic Treaty Organization (NATO), and even for the United States. Concerns about natural gas security reflect uncertainty about available natural gas supplies, how supplies are delivered to the market (by pipeline or by liquefied natural gas tanker), and how much is paid for these supplies. In the aftermath of natural gas and oil supply shutoffs from Russia, Europe is trying to ensure its own security of supply through diversification and energy efficiency. Russia is trying to ensure energy security by diversifying its customer base, investing in the entire value chain (not only the upstream), and ensuring adequate investment levels both in its own energy supplies and those of its Central Asian neighbors. The way in which the policies of regional and international organizations differ from the policies of individual states is hampering progress on energy market liberalization and energy efficiency programs, both of which are necessary to achieve stable market relationships between producers and consumers. To accurately frame the policy debate, one must understand the current and future role that natural gas plays for Europe's energy mix. Europe's demand for natural gas is increasing and Russia is the region's main supplier. However, Russia's ability to invest in upstream natural gas development over the next several years will directly contribute to Russia's natural gas production growth and Europe's security of supply. In the meantime, several alternative energy sources and hedging instruments are expected to mitigate Europe's dependency. For the region to best take advantage of these options, continued regional natural gas market liberalization is necessary. Europe and Russia's Natural Gas Interdependence In 2006, Europe depended on Russia for 34 percent of its natural gas imports, including European LNG imports (see figure 1). In contrast, Russia depended on Europe for 60 percent of its natural gas exports, sending the remainder via pipeline to the Commonwealth of Independent States (CIS), predominantly Ukraine and Belarus. (1) In evaluating Europe's true dependency on Russian natural gas imports, it is essential to understand the role that it plays in the total energy mix. In the decade after the mid-1990s, oil's share in Europe's primary energy consumption fell by around 3 percentage points while natural gas's share increased by twice this amount, to around 24 percent of final consumption. On the one hand, Europe's natural gas consumption growth could slow in the future. Since the mid-1990s, EU demand for natural gas has been growing at a rate of around 4 percent per year. (2) The International Energy Agency (IEA) estimates that, over the next several years, the EU's demand for natural gas will grow at a slightly lower rate, by around 0.8 to 1 percent per year between 2004 and 2015. (3) Even though the growth rate is expected to slow in the next several years, as figure 2 shows, Europe's natural gas import dependency is still more than 30 percent higher today than it was only a decade ago. …