Determinant Factors In Lng Import Pricing a Comparison Study Between The European & Far East Asia Market And Implication To Indonesia Lng Marketing Strategy
Keywords:
LNG Import Price, European LNG Market, Far East Asia Market, Structural VAR, Unit Root Test, Augmented Dickey-Fuller, Phillip-Perron, and Kwiatkowski-Phillips- Schmidt-Shin, Gas Production, Natural Gas Demand, LNG Import Demand, LNG Spot Price, Brent, Japan Crude Cocktail, Japan Korea Marker, Heating Degree Days, LNG spot prices, Indonesia LNGAbstract
This study will investigate LNG prices in two major natural gas markets react with different Impulsive Response Factors (IRF) patterns. This study will also investigate whether crude oil spot price will result as the longest response length compare to other factors for both European and Far East Asia Market. Structural Vector Auto Regressive (SVAR) test will be carried out to test the hypotheses. By conducting SVAR methodology it will allow researcher to implement endogenous or exogenous variables.
The result and analysis shows that the LNG import price in European and Far East Asia market will react to different IRFS even though the reaction in both market is slightly different as the European LNG import price reaction to the IRF patterns would take a direct effect, while on the contrary Far East Asia LNG import price will react to the IRF patterns with the delayed impact. With this we conclude that Indonesia LNG supplier marketing strategy to sell to East Asia market could wait and see what is happen in the global LNG market first especially if related to contract and pricing strategy, on the other hand if they want to sell their LNG to European it is better to use the trading arms.
