Discussion Papers no. 523
Will transport cost reductions lead to lower prices?
The global natural gas market
Reduced transportation costs are usually associated with lower import prices, increased trade and price convergence. In this paper we show that the lower costs can actually lead to higher import prices in some regions, and price divergence between import regions. Using both a general theoretical approach and a numerical model of the global natural gas market, we demonstrate that the price effect from transport cost reductions depend on the relative distances between regional markets, the choice of transport technology, and supply and demand responsiveness in the different markets. Our numerical results suggest that European consumers would generally be better off if pipeline costs are reduced, while North American consumers would be better off if LNG costs are reduced.
Om publikasjonen
- Tittel
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The global natural gas market. Will transport cost reductions lead to lower prices?
- Ansvarlige
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Knut Einar Rosendahl, Eirik Lund Sagen
- Serie og -nummer
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Discussion Papers no. 523
- Utgiver
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Statistics Norway
- Emne
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Discussion Papers
- Antall sider
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28
- Målform
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Engelsk
- Om Discussion Papers
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Discussion papers comprise research papers intended for international journals and books. A preprint of a Discussion Paper may be longer and more elaborate than a standard journal article as it may include intermediate calculations, background material etc.
Kontakt
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