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Center for Energy Studies

Global LNG Pricing Terms and Revisions

Mark Agerton

Global LNG Pricing Terms and Revisions.

Asian long-term contracts for liqueed natural gas (LNG) are generally thought to index LNG prices to oil prices. This should mean that LNG and oil prices are cointegrated, yet statistical evidence for cointegration using Japanese data is not strong.

This paper examines 16 Japanese, South Korean, Taiwanese, and Spanish LNG import price series to show how one can resolve this empirical puzzle by allowing for structural breaks in the LNG-oil relationship. The paper will be published in a forthcoming issue of the The Energy Journal.