Energy

International Gas Union (IGU)

News, views and knowledge on gas – worldwide

Wholesale Gas Price Formation

- A global review of drivers and regional trends

Foreword

Following the successful 24th World Gas Conference in Buenos Aires in October 2009, we have decided to convert some of the study reports presented at the conference into IGU publications, including the report “Gas Pricing” written by Study Group B2 of the IGU Strategy Committee (PGCB). The IGU Strategy Committee is updating the review for the WGC in June 2012. Some interim findings have been published in the April 2011 edition of the IGU Magazine and are available on www.igu.org. Historically, gas prices have not been in the news to the same extent as oil prices. This is changing. The share of gas in global energy and fuel consumption has increased and also the share of internationally traded gas globally is greater than before. LNG is providing intercontinental linkages that eventually could constitute a global gas market. Natural gas is an abundant resource, it is clean and cost-competitive, and should therefore play an important role in the mitigation of climate change. However, the pricing of this valuable commodity is critical to a sustainable market growth. It is our hope that this publication can serve as one example of how vital information related to gas pricing can be shared across borders to the benefit of the global gas industry and also to enable new gas regions to learn more about the different pricing models that are being used. June 2011 Torstein Indrebø Secretary General of IGU

This publication is produced under the auspices of INTERNATIONAL GAS UNION (IGU) by the Author(s) mentioned. The Author(s) and IGU enjoy joint copyright to this publication This publication may not be reproduced in whole or in part without the written permission of the above mentioned holders of the copyright. However, irrespective of the above, established journals and periodicals...