2023年全球天然气批发价格调查报告-英文-国际气体联盟IGUVIP专享VIP免费

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Wholesale Gas Price

Survey 2023 Edition

A Global Review of Price

Formation Mechanisms

2005 to 2022

WHOLESALE GAS PRICE SURVEY 2023 EDITION

PRESIDENT'S MESSAGE 5

Section 1: EXECUTIVE SUMMARY 6

Section 2: INTRODUCTION 13

2.1 Background 14

2.2 Types of price formation and mechanisms 14

2.3 Analysing the results 15

2.4 Report layout 15

Section 3: WORLD RESULTS 16

3.1 Introduction 17

3.2 Domestic Production 17

3.2.1 2022 Survey Results - Domestic Production 17

3.2.2 2005 to 2022 Comparisons - Domestic Production 18

3.3 Pipeline Imports 19

3.3.1 2022 Survey Results - Pipeline Imports 19

3.3.2 2005 to 2022 Comparisons - Pipeline Inmports 21

3.4 LNG Imports 22

3.4.1 2022 Survey Results - LNG imports 22

3.4.2 2005 to 2022 Comparisons - LNG Imports 23

3.5 Total Imports 27

3.5.1 2022 Survey Results - Total Imports 27

3.5.2 2005 to 2022 Compaarisons - Total Imports 28

3.6 Total Consumption 29

3.6.1 2022 Survey Results - Total Consumption 29

3.6.2 2005 to 2022 Comparisons - Total Consumption 32

3.7 Analysis of Gas-On-Gas Compeition And Oil price Escalation 37

3.7.1 Gas-On-Gas Competition 37

3.7.2 Change in GOG and OPE by Consumption Category 38

3.7.3 Where are the main OPE areas? 40

Section 4: WHOLESALE PRICE LEVELS 42

4.1 Introduction 43

4.2 2022 Survey Results 43

4.2.1 Price Levels by Price Formation Mechanism 43

4.2.2 Price Levels by Region and Country 44

4.3 Comparisons 2005 to 2022 46

4.3.1 Changes in Wholesale Prices by Price Formation Mechanisms 46

4.3.2 Changes in Wholesale Prices by Region 47

4.4 Analysing the Post-Covid Rise in Gas Prices 48

Section 5: GLOBAL GAS PRICE CONVERGENCE 53

5.1 Introduction 54

5.2 Measuring Price Convergence 54

5.3 Price Convergence Using The Survey Data 54

5.4 Conclusions 60

Appendix A: REGIONAL RESULTS 61

Appendix B: SURVEY METHODOLOGY 82

Appendix C: GLOSSARY 88

Contents

WHOLESALE GAS PRICE SURVEY 2023 EDITION

Figure 1 World Price Formation 2005 to 2022 – Total Consumption 8

Figure 2 Wholesale Price Formation Mechanisms Map 9

Figure 3 World Price Formation 2005 to 2022 – LNG Imports 10

Figure 4 Spot LNG Imports 2005 to 2022 11

Figure 5 Wholesale Price Levels 2005 to 2022 by Region 12

Figure 6 World Price Formation 2022 – Domestic Production 17

Figure 7 Regional Price Formation 2022 – Domestic Production 18

Figure 8 World Price Formation 2005 to 2022 – Domestic Production 19

Figure 9 World Price Formation 2022 – Pipeline Imports 20

Figure 10 Regional Price Formation 2022 – Pipeline Imports 20

Figure 11 World Price Formation 2005 to 2022 – Pipeline Imports 21

Figure 12 World Price Formation 2022 – LNG Imports 22

Figure 13 Regional Price Formation 2022 – LNG Imports 23

Figure 14 World Price Formation 2005 to 2022 – LNG Imports 24

Figure 15 GOG LNG Imports 2005 to 2022 25

Figure 16 World LNG Price Formation 2005 to 2022 – Spot LNG Imports 25

Figure 17 GOG Spot LNG Imports 2005 to 2022 26

Figure 18 World Price Formation 2022 – Total Imports 27

Figure 19 World Price Formation 2005 to 2022 – Total Imports 28

Figure 20 World Price Formation 2022 – Total Consumption 29

Figure 21 Regional Price Formation 2022 – Total Consumption 30

Figure 22 Wholesale Price Formation Mechanisms Map 31

Figure 23 World Price Formation 2005 to 2022 – Total Consumption 32

Figure 24 Market and Regulated Pricing 2005 to 2022 36

Figure 25 Changes in GOG in Total Consumption by Type 2005 to 2022 38

Figure 26 Changes in GOG by Consumption Category 2005 to 2022 39

Figure 27 Changes in OPE by Consumption Category 2005 to 2022 39

Figure 28 OPE Domestic Production 40

Figure 29 OPE Pipeline Imports 41

Figure 30 OPE LNG Imports 41

Figure 31 Wholesale Prices in 2022 by Price Formation Mechanism 43

Figure 32 Wholesale Prices in 2022 by Region 44

Figure 33 Wholesale Prices in 2022 by Market 45

Figure 34 Wholesale Price Levels 2005 to 2022 by Price Formation Mechanism 46

Figure 35 Wholesale Price Levels 2005 to 2022 by Region 47

Figure 36 Spot Prices 2019 to 2023 49

Figure 37 Wholesale Price Heat Map 2022 51

Figure 38 Change in Demand Map 2022 v 2021 51

Figure 39 Wholesale Price Level and Change in Demand 2022 52

Figure 40 Average Price and Standard Deviation of the Full Dataset 55

Figure 41 Global Gas Price Variation Trend 55

Figure 42 Price Convergence for Gas Importing Markets 56

Figure 43 Price Convergence for Market Related Prices 56

Figure 44 Price Convergence Dynamic for Non-Market and Market Related Prices 57

Figure 45 Price Convergence for OPE Prices 57

Figure 46 Number of Markets where OPE or GOG is the Majority Mechanism 58

Figure 47 Price Convergence for Market Related and GOG Prices 58

Figure 48 Price Convergence for OPE and GOG Prices 59

Figure 49 Price Convergence for Europe 59

Figure 50 Price Convergence for Pipeline and LNG Importing Countries 60

Figure 51 North America Price Formation 2022 62

Figure 52 North America Price Formation 2005 to 2022 63

Figure 53 Europe Price Formation 2022 64

Figure 54 Europe Price Formation 2005 to 2022 65

Figure 55 Northwest Europe Price Formation 2005 to 2022 66

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WholesaleGasPriceSurvey2023EditionAGlobalReviewofPriceFormationMechanisms2005to2022Contents56PRESIDENT'SMESSAGESection1:EXECUTIVESUMMARY1314Section2:INTRODUCTION142.1Background152.2Typesofpriceformationandmechanisms152.3Analysingtheresults2.4Reportlayout1617Section3:WORLDRESULTS173.1Introduction173.2DomesticProduction183.2.12022SurveyResults-DomesticProduction193.2.22005to2022Comparisons-DomesticProduction193.3PipelineImports213.3.12022SurveyResults-PipelineImports223.3.22005to2022Comparisons-PipelineInmports223.4LNGImports233.4.12022SurveyResults-LNGimports273.4.22005to2022Comparisons-LNGImports273.5TotalImports283.5.12022SurveyResults-TotalImports293.5.22005to2022Compaarisons-TotalImports293.6TotalConsumption323.6.12022SurveyResults-TotalConsumption373.6.22005to2022Comparisons-TotalConsumption373.7AnalysisofGas-On-GasCompeitionAndOilpriceEscalation383.7.1Gas-On-GasCompetition403.7.2ChangeinGOGandOPEbyConsumptionCategory3.7.3WherearethemainOPEareas?4243Section4:WHOLESALEPRICELEVELS434.1Introduction434.22022SurveyResults444.2.1PriceLevelsbyPriceFormationMechanism464.2.2PriceLevelsbyRegionandCountry464.3Comparisons2005to2022474.3.1ChangesinWholesalePricesbyPriceFormationMechanisms484.3.2ChangesinWholesalePricesbyRegion4.4AnalysingthePost-CovidRiseinGasPrices5354Section5:GLOBALGASPRICECONVERGENCE545.1Introduction545.2MeasuringPriceConvergence605.3PriceConvergenceUsingTheSurveyData5.4Conclusions6182AppendixA:REGIONALRESULTS88AppendixB:SURVEYMETHODOLOGYAppendixC:GLOSSARY2WHOLESALEGASPRICESURVEY2023EDITIONFiguresFigure1WorldPriceFormation2005to2022–TotalConsumption8Figure2WholesalePriceFormationMechanismsMap9Figure3WorldPriceFormation2005to2022–LNGImports10Figure4SpotLNGImports2005to202211Figure5WholesalePriceLevels2005to2022byRegion12Figure6WorldPriceFormation2022–DomesticProduction17Figure7RegionalPriceFormation2022–DomesticProduction18Figure8WorldPriceFormation2005to2022–DomesticProduction19Figure9WorldPriceFormation2022–PipelineImports20Figure10RegionalPriceFormation2022–PipelineImports20Figure11WorldPriceFormation2005to2022–PipelineImports21Figure12WorldPriceFormation2022–LNGImports22Figure13RegionalPriceFormation2022–LNGImports23Figure14WorldPriceFormation2005to2022–LNGImports24Figure15GOGLNGImports2005to202225Figure16WorldLNGPriceFormation2005to2022–SpotLNGImports25Figure17GOGSpotLNGImports2005to202226Figure18WorldPriceFormation2022–TotalImports27Figure19WorldPriceFormation2005to2022–TotalImports28Figure20WorldPriceFormation2022–TotalConsumption29Figure21RegionalPriceFormation2022–TotalConsumption30Figure22WholesalePriceFormationMechanismsMap31Figure23WorldPriceFormation2005to2022–TotalConsumption32Figure24MarketandRegulatedPricing2005to202236Figure25ChangesinGOGinTotalConsumptionbyType2005to202238Figure26ChangesinGOGbyConsumptionCategory2005to202239Figure27ChangesinOPEbyConsumptionCategory2005to202239Figure28OPEDomesticProduction40Figure29OPEPipelineImports41Figure30OPELNGImports41Figure31WholesalePricesin2022byPriceFormationMechanism43Figure32WholesalePricesin2022byRegion44Figure33WholesalePricesin2022byMarket45Figure34WholesalePriceLevels2005to2022byPriceFormationMechanism46Figure35WholesalePriceLevels2005to2022byRegion47Figure36SpotPrices2019to202349Figure37WholesalePriceHeatMap202251Figure38ChangeinDemandMap2022v202151Figure39WholesalePriceLevelandChangeinDemand202252Figure40AveragePriceandStandardDeviationoftheFullDataset55Figure41GlobalGasPriceVariationTrend55Figure42PriceConvergenceforGasImportingMarkets56Figure43PriceConvergenceforMarketRelatedPrices56Figure44PriceConvergenceDynamicforNon-MarketandMarketRelatedPrices57Figure45PriceConvergenceforOPEPrices57Figure46NumberofMarketswhereOPEorGOGistheMajorityMechanism58Figure47PriceConvergenceforMarketRelatedandGOGPrices58Figure48PriceConvergenceforOPEandGOGPrices59Figure49PriceConvergenceforEurope59Figure50PriceConvergenceforPipelineandLNGImportingCountries60Figure51NorthAmericaPriceFormation202262Figure52NorthAmericaPriceFormation2005to202263Figure53EuropePriceFormation202264Figure54EuropePriceFormation2005to202265Figure55NorthwestEuropePriceFormation2005to202266WHOLESALEGASPRICESURVEY2023EDITION3FiguresFigure56CentralEuropePriceFormation2005to202266Figure57MediterraneanPriceFormation2005to202267Figure58SoutheastEuropePriceFormation2005to202268Figure59ScandinaviaandBalticsPriceFormation2005to202269Figure60AsiaPriceFormation202270Figure61AsiaPriceFormation2005to202271Figure62AsiaPacificPriceFormation202272Figure63AsiaPacificPriceFormation2005to202273Figure64LatinAmericaPriceFormation202274Figure65LatinAmericaPriceFormation2005to202275Figure66FormerSovietUnionPriceFormation202276Figure67FormerSovietUnionPriceFormation2005to202277Figure68AfricaPriceFormation202278Figure69AfricaPriceFormation2005to202279Figure70MiddleEastPriceFormation202280Figure71MiddleEastPriceFormation2005to202281Figure72IGURegions84Figure73DataCollectionForm85Table1WorldPriceFormation2022–TotalImports27Table2WorldPriceFormation2005to2022–TotalImport28Table3WorldPriceFormation2022–TotalConsumption30Table4WorldPriceFormation2005to2022–TotalConsumption33WHOLESALEGASPRICESURVEY2023EDITION4President'sMessageWelcometothe15thannualeditionoftheflagshipInternationalGasUnionWholesaleGasPriceSurveyreport.Thiseditioncontinuestoshowthecriticalityofawell-functioningglobalgasmarketatwork,asthegasmarketshavebeenexperiencingthemostturbulentperiodintheirhistoryamidstasevereglobalenergycrisisandanongoingwarbetweenRussiaandUkraine.ThelightsstayedoninEuropeduring2022becausetherewasaworkingglobalgasmarket,enablingEuropetoattractunprecedentedadditionalvolumeofLNGtoreplacelostRussianpipelinesupplyvolumes.Afunctioningmarketallowedtoredrawtheglobalgastrademap,withoutinterruptingtheglobalmovementofmolecules.However,inthetightsupplyconditionssuchaswehavetoday,thatalsounfortunatelyhadimpactsondemand,forcingconsumerstoswitchtomorepollutingalternatives,orinsomecasesshutdownoperations,whiletheabnormallyhighpricesleftsomeplayersinthedevelopingpartsoftheworldoutofthemarketcompletely.Thefifteensurveystakentogethertellaverycompellingstoryofsignificantevolutioninthewholesalepriceformationmechanisms,duringaperiodofkeydevelopmentsanddynamicchangesintheglobalgasmarkets.TheWGPSreportseriesisauniquesourceofinformationonglobalwholesalegaspricetrends.IcongratulatetheIGUStrategyCommitteewhichlaunchedtheseriesin2006andthankthemforbringingthisimportantinsightontheevolutionofglobalgasmarketsandpricemechanismstolife.TheInternationalGasUnionisaglobalvoiceofthegasindustry.IGU’smorethan150membersinover80countriesrepresent90%oftheglobalgasmarketandeverysegmentofthegasvaluechain,fromexplorationandproductionofnaturalgas,lowandzerocarbongasandtechnologies,totransit,pipelinesandLNG,andthroughdistributionandfinaluse.Ourglobalcross-segmentmembershiptranslatesintooneofthemostextensiveknowledgenetworksintheenergyindustry.HundredsofprofessionalsfrommemberorganisationsworkintheIGUCommitteesandTaskForcestoproduceinsightfulindustryreportsandtohelpdesigntheTechnicalProgramofoneofthebiggestglobalenergyevents,theWorldGasConference,withitsnexteditioninBeijing,China,in2025.TheCommitteesalsoplayaroleinshapingthetechnicalcomponentoftheIGU’stwoadditionalflagshipglobalgasevents,includingtheInternationalLNGConferenceseriesandtheupcomingInternationalGasResearchConference(IGRC2024)inBanff,Canada.Ihopethatyouwillfindthereportinformativeandhelpful.LiYalanPresident,IGUWHOLESALEGASPRICESURVEY2023EDITION5Section1Section1ExecutiveSummaryWHOLESALEGASPRICESURVEY2023EDITION6Section1ExecutiveSummaryThisisthefifteenthIGUWholesaleGasPriceSurvey1,whichbeganin2005.Thesurveywaslaunchedtoassessglobalwholesalepriceformationmechanismsandtracktheirevolution.Itclassifiesglobalwholesalepriceformationmechanismsintoninedistinctcategories(seetablebelow)andquantifiestheshareofeachmechanisminwholesale2gaspricesacrosstheworld.OilPriceEscalation(OPE)PRICEFORMATIONMECHANISMSGas-on-GasCompetition(GOG)Thewholesalegaspriceislinked,usuallythroughabasepriceandanescalationclause,tocompetingfuels,typicallycrudeoil,gasoiland/orfueloil.Insomecases,coalpricescanbeusedascanelectricityprices.Thewholesalegaspriceisdeterminedbytheinterplayofdirectgassupplyanddemand–gas-on-gascompetition–andistradedoveravarietyofdifferentperiods(daily,monthly,annuallyorotherperiods).Thisincludesgastradedonashort-termhub-pricedbasisandlonger-termcontractsthatusegaspriceindicestodeterminethemonthlyprice.BilateralMonopoly(BIM)Thepriceisdeterminedbybilateraldiscussionsandagreementsbetweenalargesellerandalargebuyer,withthepricebeingfixedforaperiodoftime–typicallyoneyear.TheremaybeawrittencontractinplacebutoftenthearrangementisattheGovernmentorstate-ownedcompanylevel.NetbackfromFinalProduct(NET)Thepricereceivedbythegassupplierisafunctionofthepricereceivedbythebuyerforthefinalproductthebuyerproduces.Thismayoccurwherethegasisusedasafeedstockinchemicalplants,suchasammoniaormethanol,andisthemajorvariablecostinproducingtheproduct.Regulation:CostofService(RCS)Thepriceisdetermined,orapproved,formallybyaregulatoryauthority,orpossiblyaMinistry,butthelevelissettocoverthe“costofservice”,includingtherecoveryofinvestmentandareasonablerateofreturn.Regulation:SocialandPolitical(RSP)Thepriceisset,onanirregularbasisonapolitical/socialbasis,inresponsetotheneedtocoverincreasingcosts,orpossiblyasarevenueraisingexercise–ahybridbetweenRCSandRBC.Regulation:BelowCost(RBC)Thepriceisknowinglysetbelowtheaveragecostofproducingandtransportingthegasoftenasaformofstatesubsidytothepopulation.NoPrice(NP)ThegasproducediseitherprovidedfreetothepopulationandNotKnown(NK)industry,possiblyasafeedstockforchemicalandfertilizerplants,orinrefineryprocessesandenhancedoilrecovery.Thegasproducedmaybeassociatedwithoiland/orliquidsandtreatedasaby-product.Nodataorevidence.1ThesurveyhasbeenundertakenbyMikeFulwood,SeniorResearchFellow,OxfordInstituteofEnergyStudies,undertheguidanceoftheIGUStrategyCommittee.2Thewholesalepricewouldtypicallybeahubprice(e.g.HenryHubortheNBP),butinmarketswherethereisnohubprice,itcouldtypicallybeaborderprice,orcouldbeapproximatedbywellheadpricesorcity-gateprices.Generally,thewholesalepriceislikelytobedeterminedsomewherebetweentheentrytothemainhigh-pressuretransmissionsystemandtheexitpointstolocaldistributioncompaniesorverylargeendusers.WHOLESALEGASPRICESURVEY2023EDITION7Section1ExecutiveSummaryKeyFindingsWholesaleGasPriceFormationSincethestartofthesurveyseries,gasmarketshavebeenundergoingasignificanttransformation,withthemostimportanttrendbeingthatofthegrowthoftheshareofcompetitivelypricedviagas-on-gas(GOG)competition,largelyattheexpenseofoil-price-escalation(OPE)pricing,andformsofregulatedpricing.Between2005and2022,theGOGshareofglobalgasconsumptionnearlydoubledfrom31.5%to50%,whiletheoil-price-escalation(OPE)indexedpricemechanismsharefellfrom24%to17.5%.Figure1-WorldPriceFormation2005to2022-TotalConsumptionFigure1WorldPriceFormation2005to2022–TotalConsumption100%80%60%40%20%0%2010201520162017201820192020202120222005OPEGOGBIMNETRCSRSPRBCNP•MostoftheriseinGOG,anddeclineinOPE,between2005and2017weredrivenbychangesinpipelineimportsinEurope,withOPEalmostdisappearinginNorthwestEurope3andCentralEurope4,thanksinlargeparttotheEuropeanenergymarketreformandliberalisationoverthatperiod.•TheremainingenclavesofOPEinEuropeareinTurkey,SoutheastEurope(includingGreece)andtheBalticcountries,whichareheavilyreliantonRussianpipelinegas,plusSpainandPortugal,reliantonAlgerianpipelinegasandLNG.•Since2016,thedisplacementofOPEbyGOG,haslargelybeenaresultoftheriseinGOGpricingshareinLNGimports,especiallyviaspotmarketLNGtrade.•Upuntil2016,therewasaswitchawayfromregulatedpricingmechanismstowardsthemore“market-based”pricingmechanismssuchasGOGandOPE.Sincethenthatmovehaspaused,withthekeychangeinpricingmechanismsbeinginthenon-regulatedLNGmarket.•Withintheregulatedcategories,thebigchangesoccurredbetween2005and2012,seeninamoveawayfromsubsidisedpricingorregulatedbelowcost(RBC)tohigher,butstillregulatedprices.3Belgium,Denmark,France,Germany,Ireland,Luxembourg,Netherlands,UK.4Austria,CzechRepublic,Hungary,Poland,Slovakia,Switzerland.WHOLESALEGASPRICESURVEY2023EDITION8Section1ExecutiveSummaryInthe2022surveyresponseswerereceivedfrom85outof113markets,andtheseresponsescovered91%ofthetotalglobalgasconsumption5.Thedramaticallychangedglobalmarketof2022sawtheGOGshareriseagainby1.5percentagepoints,mostlyattheexpenseoftheOPEshare,risingtoover50%ofglobalgasconsumptionforthefirsttime.Italsoreachedanewhighof56%asashareoftotalimportedgasvolumes.TherewasasignificantriseintheGOGshareinEuropeasspotLNGimportsincreasedsharply,andassomeofTurkey’scontractedpipelineimportsfromRussiaswitchedtohubpricingawayfromoilindexation.Inaddition,thepricingofpipeimportsfromAlgeriaintoTunisiachangedtoGOGfromOPE.SpotLNGimportsalsoroseinSouthKoreaandChineseTaipei,whilerisingconsumptioninRussiaalsoboostedtheGOGshare.Takentogether,thesemorethanoffsetthedeclineinGOGinAsia,duetoChinaandPakistanreducingspotLNGimports.Totalglobalgasimportsweredowninvolumeterms,asRussianpipeexportstoEuropefell,buttherelativesharesofOPEandGOGwerenotimpactedmuch,sincethenetlossofGOGpipelineimportsfromRussiawasoffsetbytheswitchawayOPEtoGOGinothermarketsandbytheadditionalvolumesofspotLNGintoEurope.Themapbelowshowsthemainpriceformationmechanismbymarket.Foreachmarketthehighestshareisusedtocategorisethedominantpriceformationmechanismforthatmarket.OPEandGOGareself-explanatory,regulatedcoversthe3categoriesRCS,RSPandRBC,whileOtherispredominantlyBIMthebilateralmonopolycategory.Figure2WholesalePriceFormationMechanismsMapGREENLANDICELANDFINLANDSWEDENNORWAYRUSSIACANADAESTONIAUNITEDKINGDOMDENMARKLATVIALITHUANIAIRELANDPOLANDBELARUSNETHERLANDSGERMANYBELGIUMCZECHREPUKRAINESWITZERLANDFRANCESLOVAKIAKAZAKHSTANPORTUGALAUSTRIAHUNGARYMOLDOVAMONGOLIASLOVENIAROMANIAMONACOCROATIASERBIAGEORGIAUZBEKISTANKYRGYZSTANMONTENEGROBULGARIAUNITEDSTATESSPAINITALYALBANIAARMENIAAZERBAIJANNORTHKOREASOUTHKOREAMALTAGREECETURKEYTURKMENISTANTAJIKISTANJAPANTUNISIABOSNIA&CYPRUSSYRIAAFGHANISTANCHINAALGERIACHINESETAIPEIHERZOGOVENIALEBANONIRAQIRANKONGMOROCCOPALESTINIANTERRITORYJORDANPAKISTANPHILIPPINESKUWAITCUBAISRAELNEPALBHUTANJAMAICABAHRAINLIBYAEGYPTHAITIWESTERNSAHARAUAEBANGLADESHDOMINICAREPUBLICQATARINDIAMEXICOMAURITANIASAUDIARABIAMYANMARLAOSHONGBELIZESENEGALGUATEMALAPUERTORICOTHEGAMBIAMALINIGERCHADSUDANOMANTHAILANDVIETNAMHONDURASTRINIDADANDTOBAGONIGERIAERITREAYEMENNICARAGUABURKINACENTRALSOUTHCAMBODIAFASOAFRICANSUDANDJIBOUTIELSALVADORVENEZUALAGUYANAGUINEA-BISSAUBRUNEICOSTARICACOLOMBIAPANAMASURINAMEGUINEAETHIOPIAFRENCHGUIANASIERRALEONECAMEROONREPSOMALIASRILANKAMALAYSIALIBERIACONGOUGANDAPAPUANEWGUINEACOTED’IVOIREKENYAGHANAECUADORTOGOEQUATORIALRWANDAGUINEADRCONGOTANZANIABURUNDIBENININDONESIAPERUBRAZILGABONTIMOR-LESTEANGOLAMALAWIZAMBIAMOZAMBIQUEBOLIVIAZIMBABWENAMIBIABOTSWANAMADAGASCARPARAGUAYAUSTRALIAESWATINIWholesalegasprices2022CHILEURUGUAYLESOTHOSOUTHAFRICAGasongascompetitionARGENTINAOilpriceescalationRegulatedNEWZEALANDOther5DuetotheongoingRussia-Ukrainewar,responsesfromtheFormerSovietunionmarketsweremorechallengingtoobtain,andsomedatawasresearchedbytheauthor.WHOLESALEGASPRICESURVEY2023EDITION9Section1ExecutiveSummaryEuropeisnowalmostallGOG,withevenSpainhavingmoreGOGthanOPE.TurkeyisstillcategorisedasOPEbutnow,withthechangeinpricingintheGazpromcontracts,itonlyjustexceedsGOG.82%ofEuropeisnowGOG,almostalldomesticproductionis,and82%ofpipelineimportsand76%ofLNGimportsareGOG.In2005–thefirstsurvey–onlytheUK,inEurope,hadanysignificantlevelsofGOG.OPEisstillthelargestcategoryinmostAsiancountries,eventhosesuchasMalaysia,VietnamandthePhilippineswhereitismostlydomesticproduction.ThereisalargeareaoftheworldcoveringtheFormerSovietUnion,theMiddleEastandNorthAfricawherepricesremainlargelyregulated.KeyFindingsLNGMarketThegrowthintheshareoftotalGOGinLNGimportstookoffin2017.ThetotalGOGshareofLNGimportsnearlydoubledbetween2016,whenitwas25%,and2022whenitreached47%ofallLNGtrade.Between2016and2018,therisewasallduetorisingspotLNGimports,whilein2019theincreasewaspartlyspotLNGimportsandpartlythesignificantrushofLNGtoEurope’stradedmarkets.In2020,theincreasewasdrivenbytherisingspotLNGcargoes,andin2021moreHenryHub-pricedUSLNGenteredthemarket.TheshareofspotLNG6inthemarketin2022,inthissurvey,rosebackagainto35%,followingasmalldeclinein2021.ThelatestGIIGNL7annualreportstatedthatspotandshort-termLNGcontractswerearound35%oftotalLNGtrade–thesameastheestimatedmeasurefromthissurvey.GIIGNLalsonotedthat“true”spotvolumes(i.e,volumesdeliveredwithinthreemonthsfromthetransactiondate)reached28%oftotalimportsin2022–somewhatlowerthanthissurveyfigurebutwithadifferentdefinition.Figure3FigurWe2or-ldWPorrilcdePFroicremFaotrimonat2i0o0n52t0o0520t2o22–02L2N-GLINmGpIomrtpsorts100%40.0%80%%SpotLNG30.0%60%20.0%40%10.0%20%0%2005200720092011201220132014201520162017201820192020202120220.0%OPEGOGtradedGOGspot%SpotLNG6ThedefinitionofSpotLNGinthissurveyincludesspotcargoesandcontractsunderoneyear.ThismakesitdistinctfromthedefinitionusedbyGIIGNLintheirannualreport,forspotandshort-termtrades,whichincludedcontractsuptofouryears.LNGbeingimportedintothetradingmarketsofNorthAmericaandNorthwestEurope,isnowsplitbetweenSpotandTradedvolumes,toavoidthecategorisationofsomespotvolumesastradedvolumes.Inaddition,insomecountrieswehavealsoattemptedtocategoriseUScargoes,whicharespotandthoseundercontractswithHenryHublinkedpricing,whichwouldbeincludedinthe“Traded”category.7GIIGNL2023AnnualReport.https://giignl.org/giignl-releases-2023-annual-report/.WHOLESALEGASPRICESURVEY2023EDITION10userid:246491,docid:144074,date:2023-10-27,sgpjbg.comSection1ExecutiveSummaryItisnotablethatthegrowthofspotLNGimportspriorto2010,waspredominantlyintheAsiaPacificregion,BSCMwiththegrowthinAsiastartingpost-2010.ThespotLNGvolumeinEuropewasrelativelylowuntil2018,withtheGOGLNGimportsbeingmainlyintothetradedNorthwestEuropemarkets.TheriseinspotLNG,from2016,waslargelyaconsequenceofthesurgeinUSLNGexports.Since2016,therehavebeenincreasingvolumesofspotLNGintotheAsianmarketsofIndiaandChina,especiallythelatter,andintoJapanandSouthKorea(AsiaPacific).SpotLNGintoEuropebegangrowingstronglyin2019,astherisingLNGsupplyfoundahomethere.SpotLNGintoChinareachedarecordofalmost50bcmin2021,butthismorethanhalvedin2022,withflatChinagasdemand,andthepullofEuropeforspotcargoes–wherespotvolumesof64bcmwerealmost40%oftotalLNGimportsintoEurope.AsiaPacificvolumesin2022roseslightlywithincreasesinSouthKorea,ChineseTaipeiandThailand,morethanoffsettingdeclinesinJapanandelsewhere.ThevolumeofspotLNGcargoeshaverisenalmostthreetimesinfiveyears,from63bcmin2016to171bcmin2022.FFigiguurere415-GSOpoGtSLpNoGtILmNpGoIrmtsp2o0r0t5st2o002502t2o2022180160140120100806040200200520072009201020122013201420152016201720182019202020212022NorthAmericaEuropeAsiaAsiaPaciﬁcLatinAmericaFSUAfricaMiddleEastKeyFindingsLNGMarket2022sawrecordgaspricesand,withEurope’swholesalepricesreachingover$30perMMBTU,whichdraggeduptheaverageWorldpriceto$9.44perMMBTU–itshighestpriceever–comparedtoarecordlowof$3.23perMMBTUin2020.ThehighestpriceseverwerealsorecordedinallotherregionsapartfromNorthAmericaandtheFormerSovietUnion.Globally,wholesalepriceshadgenerallyrisenbetween2005and2014,apartfromNorthAmericawheretheshalegasrevolutioncontributedtoareductioninpricesbyunlockingamplenewsupplyandturningtheWHOLESALEGASPRICESURVEY2023EDITION11Section1ExecutiveSummaryregionfromanetgasimporterintooneofthemainexporters(in2022theUSwasthesecondlargestexportedofLNGintheworld).FFiigguurree53-WhWohloelseasalelePPrriicceeLLeevveelsls22000055toto2022022b2yBRyegRieongion35.030.025.0$/MMBTU20.015.010.05.00.0200520072009201120122013201420152016201720182019202020212022NorthAmericaEuropeAsiaAsiaPaciﬁcLatinAmericaFSUAfricaMiddleEastWorldTheregionswhichhavehadalotofregulatedpricing–Africa,theMiddleEastandFSU–generallyexperiencedrisingpricesthrough2015beforealevellingoff,drivenbythemoveawayfrommoresubsidisedwholesalepricesinmanycountries.ThiswasalsothecaseintheFSU,especiallyRussia,through2013,butthedeclineinUSdollarpricessincethenhaslargelyreflectedcontinuedcurrencyweakness,withroublepricesbeingmaintained.Since2015,pricesinAsia,AsiaPacificandEuropehadbroadlytrackedeachother,butthislinkwasbrokenin2019asspotpricesdroppedsignificantlyinawell-suppliedmarket,whichbenefitedtheEuropeanmarketmuchmorethanAsiaandAsiaPacificwherepricesbarelychangedfrom2018levels.Thesedifferenceswidenedfurtherin2020asspotpricescollapsedfurtherinthepandemic.However,in2021,withtherapidpost-pandemicdemandrecoveryandgrowthdrivingasurgeinhubprices,EuropeanpricesleaptaboveAsiaandAsiaPacificprices,whereOPEpricesonlyroseslightly.Europeaveragewholesalepriceswereover$13perMMBtu,whileAsiaandAsiaPacificpriceswerejustover$8perMMBtuin2021.Thesetrendswereexacerbatedfurtherin2022,withEuropepricesat$32.50,AsiaPacificpricesat$14.50andAsiapricesatjustover$10perMMBTU.Thevariationingaspricelevelsofthemarketswidenedsignificantlyin2021andevenmorein2022.Therehadbeenatrendofgreaterglobalgaspriceconvergencefrom2005throughto2015,butthistrendstalledsomewhatasweenteredaperiodoflowerprices,andthendivergedsharplyin2021and2022,withthedivergencedoublingfrom2015.WHOLESALEGASPRICESURVEY2023EDITION12Section1Section2IntroductionWHOLESALEGASPRICESURVEY2023EDITION13Section2Introduction2.1BACKGROUNDThe2022IGUWholesaleGasPricesurveyisthefifteenthtobeundertakeninaserieswhichbeganatthestartofthe2006to2009IGUtrienniumculminatingintheWorldGasConferenceinBuenosAires.Previoussurveyswereundertakenfortheyears2005,2007,2009,2010,andthenannuallyfrom2012.Thefifteensurveyshaveconfirmedthesignificantchangesinwholesalepriceformationmechanismsduringaperiodofkeydevelopmentsandupheavalintheglobalgasmarket.Inthe2022surveyresponseswerereceivedfor85outof113markets,andtheseresponsescovered91%oftotalworldconsumption.Inpart,followingtheRussiawarwithUkraine,responsesweredifficulttogetforsomecountries,especiallyintheFormerSovietUnion,butestimateddataontheremainingmarkets,whereresponseswerenotreceived,wasresearchedbytheauthorofthereportand/orbasedonpastresponses.2.2TYPESOFPRICEFORMATIONMECHANISMSInpreparationfortheinitial2005survey,aseriesofdiscussionswereheldattheIGUgroupmeetings,in2006andearly2007,onthedefinitionofdifferenttypesofpriceformation.Itwasdecidedtouseforcategorisationpurposesthewholesalepricingmechanisms,summarisedbelow.OilPriceEscalation(OPE)PRICEFORMATIONMECHANISMSGas-on-GasCompetition(GOG)Thewholesalegaspriceislinked,usuallythroughabasepriceandanescalationclause,tocompetingfuels,typicallycrudeoil,gasoiland/orfueloil.Insomecases,coalpricescanbeusedascanelectricityprices.Thewholesalegaspriceisdeterminedbytheinterplayofdirectgassupplyanddemand–gas-on-gascompetition–andistradedoveravarietyofdifferentperiods(daily,monthly,annuallyorotherperiods).Thisincludesgastradedonashort-termhub-pricedbasisandlonger-termcontractsthatusegaspriceindicestodeterminethemonthlyprice.BilateralMonopoly(BIM)Thepriceisdeterminedbybilateraldiscussionsandagreementsbetweenalargesellerandalargebuyer,withthepricebeingfixedforaperiodoftime–typicallyoneyear.TheremaybeawrittencontractinplacebutoftenthearrangementisattheGovernmentorstate-ownedcompanylevel.NetbackfromFinalProduct(NET)Thepricereceivedbythegassupplierisafunctionofthepricereceivedbythebuyerforthefinalproductthebuyerproduces.Thismayoccurwherethegasisusedasafeedstockinchemicalplants,suchasammoniaormethanol,andisthemajorvariablecostinproducingtheproduct.Regulation:CostofService(RCS)Thepriceisdetermined,orapproved,formallybyaregulatoryauthority,orpossiblyaMinistry,butthelevelissettocoverthe“costofservice”,includingtherecoveryofinvestmentandareasonablerateofreturn.Regulation:SocialandPolitical(RSP)Thepriceisset,onanirregularbasisonapolitical/socialbasis,inresponsetotheneedtocoverincreasingcosts,orpossiblyasarevenueraisingexercise–ahybridbetweenRCSandRBC.WHOLESALEGASPRICESURVEY2023EDITION14Section2IntroductionPRICEFORMATIONMECHANISMS(Continued)Regulation:BelowCost(RBC)Thepriceisknowinglysetbelowtheaveragecostofproducingandtransportingthegasoftenasaformofstatesubsidytothepopulation.NoPrice(NP)ThegasproducediseitherprovidedfreetothepopulationandNotKnown(NK)industry,possiblyasafeedstockforchemicalandfertilizerplants,orinrefineryprocessesandenhancedoilrecovery.Thegasproducedmaybeassociatedwithoiland/orliquidsandtreatedasaby-product.Nodataorevidence.2.3ANALYSINGTHERESULTSInthediscussionofregions,theIGUregionaldefinitionsareusedandthereisamapintheAppendixwhichshowstheregions.AkeypointtonoteisthattheAsiaregionisChinaandtheIndiansub-continentandAsiaPacificistherestofwhatisoftencalledAsia.2.4REPORTLAYOUTSection3ofthereportcoverstheresultsattheWorldlevelofthe2022survey,andacomparisonoftheresultsacrossallfifteensurveys,forthedifferentcategories–domesticproduction,pipelineimports,LNGimports,totalimportsandtotalconsumption.TheGOGandOPEcategoriesarealsoanalysedinmoredetail.Section4ofthereportcoverswholesalepricelevelsincludingadiscussionandanalysisoftheresultsofthe2022survey,byregion,priceformationmechanismandcountry,andthencomparisonsoverallsurveys.Section5ofthereportcontainsananalysisofglobalgaspriceconvergenceoverthefifteensurveys.AppendixAofthereportlooksattheindividualregions(IGUdefinitions)resultsforthe2022surveyandcomparisonsacrossallsurveysforthepriceformationmechanisms.AppendixBdescribesthesurveymethodology,includingthedatacollectionmethod,theIGUregionaldefinitions,thedefinitionsofthepriceformationmechanismsandtheanalyticalframework.Theresultsforprevioussurveysmay,insomecases,appearslightlydifferentfromwhathasbeenpublishedinpreviousreports.ThisreflectsmostlyrevisionstoIEAdataonconsumption,production,importsandexportsbutcanalsoreflectretrospectivechangestopriceformationclassificationwhensurveyrespondentshaveabetterappreciationoftheclassificationdefinitionsastheyreflectupontheresultsfromthesurveysoverall.WHOLESALEGASPRICESURVEY2023EDITION15Section1Section3WorldResultsWHOLESALEGASPRICESURVEY2023EDITION16Section3WorldResults3.1INTRODUCTIONThissectioncoversthefullresultsandanalysisattheWorldlevelforwholesalepriceformationmechanismsandcomprisesresultsforthe2022surveyandcomparisonsandanalysisoftheresultsofthesurveysfrom2005to2022fortheconsumptionallocatedtothefollowingcategories:•DomesticProduction;•PipelineImports;•LNGImports;•TotalImports;•TotalConsumption.Thereisalsoasub-sectionwhichanalysesinmoredetailtheGOGandOPEcategoriesforallthesurveys.3.2DOMESTICPRODUCTION3.2.12022SurveyResults–DomesticProductionDomesticproductionin2022accountedforsome73%oftotalworldconsumption–around2,999bcm.FigFuigruer6e4-WWoorlrdldPPrriciceeFFoorrmmaattiioonn22002222–-DDoommeessttiiccPPrroodduuccttiioonnRBC7%NB0%OPE10%RSP18%RCS%13GOG49%NET1%BIM2%ThepercentagesharesofthemechanismsforeachregionareshowninFigure7.GOGhasthelargestshareindomesticproductionat49%,totallingsome1,473bcm,withNorthAmericaaccountingfor1,007bcm–around68%ofthetotal.ThenextlargestshareisintheFormerSovietUnion,wherethesalesofgasinRussiatothelargeeligiblecustomersbyeitherGazpromortheindependentproducersisclassifiedasGOG(seethesectiononFormerSovietUnionintheregionalanalysisforfurtherdiscussion),accountingforsome247bcm.ThebalanceisinEuropeat68bcm–principallytheUKplustheWHOLESALEGASPRICESURVEY2023EDITION17Section3WorldResultsNetherlandsandRomania,Asiaat55bcm–IndiaandChina(seeAppendixAcoveringregionalanalysisonAsiaforfurtherdiscussion),AsiaPacificat38bcm–AustraliaandNewZealand,andLatinAmericaat26bcm–mainlyArgentinaandColombia.Figure7RegionalPriceFormation2022-DomesticProductionFigure5-RegionalPriceFormation2022-DomesticProductionTotalMiddleEastAfricaFSULatinAmericaAsiaPaciﬁcAsiaEuropeNorthAmerica0%20%40%60%80%100%OPEGOGBIMNETRCSRSPRBCNPOPEhasarelativelysmallshareindomesticproductionat10%,totallingsome301bcm,with174bcminAsia–ChinaandPakistanmainly,83bcminAsiaPacific–Thailand,Indonesia,Vietnam,Philippines,AustraliaandMalaysia,20bcminLatinAmerica–BrazilandColombia,theMiddleEastat19bcminKuwaitandIsrael,andsmallamountsinAfrica,mainlyTunisia,andEurope.Theregulatedcategories–RCS,RSPandRBC–intotalaccountfor38%ofdomesticproduction–some1,139bcm,withRCSprincipallyintheFormerSovietUnion,AsiaandAsiaPacific,RSPprincipallyintheMiddleEast,FormerSovietUnion,LatinAmericaandAsiaPacificandRBCintheFormerSovietUnion,Africa,LatinAmericaandtheMiddleEast.Amoredetailedbreakdownoftheregulatedcategoriesiscontainedintheregionalanalysissections.3.2.22005to2022Comparisons–DomesticProductionThemainchangesinpriceformationoverthefifteensurveyshavebeenthegeneralriseindomesticGOGfrom35%in2005to49%in2022.Thesharerosebetween2021and2022,principallyonthebackofrisinggasdemandinNorthAmerica.TheOPEcategoryisnotparticularlylargeintermsofdomesticproductionanddeclinedslightlybetween2021and2022,withlowerproductioninPakistanandintheOPEcategoryinChina.Overtheperiodasawhole,GOGindomesticproductionhasgainedsharefromthethreeregulatedcategorieswhichin2005totalledsome52%comparedto38%in2022.Halfofthisoccurredin2009and2010whentheGOGcategoryincreasedinRussiaattheexpenseoftheregulatedcategories,asthemarketbegantoopenuptoindependentsmore,andtherewasmoreeffectivecompetitionbetweentheWHOLESALEGASPRICESURVEY2023EDITION18Section3WorldResultsindependentsandGazpromforpowersectorandindustrialcustomers.ThiswasfollowedbythechangesinIndiain2015,asregulatedpricingwasreplacedwithaformulalinkedtointernational,predominantlyhub,pricesforkeysectors.TherehasalsobeenanincreaseinGOGinLatinAmericaaswell,principallyin2007and2009.Figure8FigurWe6or-lWdPorrilcdePFroicremFaotriomna2ti0o0n52t0o0250t2o22-0D2o2m-DeostmicePsrtoicdPurcotdiounction100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNPWithintheregulatedcategories,therehavebeentwomainchanges,in2009whenRussiachangedfromRBCtoRCSaspriceswerefinallyincreasedabovethecostofproductionandtransportation,andin2012whenIranincreasedpricessharplytomovefromRBCtoRSP.RSPincreasedagainin2014aspricestothepopulationinRussiawasswitchedawayfromRCS.In2017,therewasalsoachangeinMalaysia,awayfromRSPtoRCS.In2020therewasaswitchawayfromRCSasitdeclinedinRussia,asthatwasthesectorhitbylowerdemand,andinMalaysiawhichmovedawayfromRCStoOPE.In2021theRSPcategorygainedsharewithmorerapiddemandgrowthinMiddleEast,AsiaPacificandFSU.TheRSPsharefellbackin2022,asdomesticproductionintheUkraineswitchedtoGOG.3.3PIPELINEIMPORTS3.3.12022SurveyResults–PipelineImportsPipelineimportsin2022accountedforsome15%oftotalworldconsumption–around595bcm8.Pipelineimportsaresplitbetweenjustthreecategories–OPE,GOGandBIM9.Theregionalbreakdownisshowninfigure10.GOGis63%ofallpipelineimports,totalling374bcm,withEuropeat243bcm,NorthAmerica117bcmandtheFormerSovietUnion6bcm(UkraineimportsfromEurope).MostoftheEuropeangasimportingcountries,outsideTurkeyandSpain,arenowdominatedbyGOGpipelineimportswiththetopfivecountriesbeingGermany,Italy,France,NetherlandsandUK.8Thisfigurerepresentsthetotaleffectivenetpipelineimportsforallcountries.ManycountrieswillproducegasandimportbypipelineandLNGandalsoexportbypipelinefromthe“pool”ofallsourcesofsupply.Grosspipelineimportsintotalin2022were716bcmsoeffectively121bcmwas“re-exported”bypipeline–asignificantamountofthiswillhavebeeninEuropeasflowpatternschangedwithpipelineimportsfromRussiafallingsharply.7ThereisaverysmallamountofRCSinAfricareflectingtheregulatedtransportationtariffelementofpipelinegasfromNigeriatoGhana.WHOLESALEGASPRICESURVEY2023EDITION19Section3WorldResultsFigure9FiguWreo7rl-dWPorricldePFroicremFaotrimonat2i0o2n220-2P2ip-ePliipneeliInmepImorptosrtsBIM11%OPE26%GOG63%OPEisaround26%ofallpipelineimports,totallingsome154bcm.Asiaaccountsforsome67bcm–China,withEuropeatsome55bcm–Turkeybeingbyfarthelargestcontributor,followedbyItaly,13bcminAsiaPacific–Thailand,SingaporeandMalaysia,10bcmintheFormerSovietUnion–Russia–and9bcminLatinAmerica–mainlyBrazilandArgentina.TherearealsosmallquantitiesincountriessuchasIranandTunisia.BIMhasthebalanceof11%,totallingsome67bcm.ThisismainlyintheFormerSovietUnionandtheMiddleEast,withasmallamountinAfrica.Figure10RegionalPriceFormation2022-PipelineImportsFigure8-RegionalPriceFormation2022-PipelineImportsTotalMiddleEastAfricaFSULatinAmericaAsiaPaciﬁcAsiaEuropeNorthAmerica0%20%40%60%80%100%OPEGOGBIMNETRCSRSPRBCNPWHOLESALEGASPRICESURVEY2023EDITION20Section3WorldResults3.3.22005to2022Comparisons–PipelineImportsThemainchangesinthefifteensurveysfrom2005to2022arethecontinuedriseinGOGfrom23%in2005to63%in2022,whichhasbeenattheexpenseoftheOPEcategory.ThedeclineinOPEwaspartlyoffsetbyaswitchfromBIMtoOPEinintra-FSUtradein2009,andmorerecentlytheimportsofpipelinegasfromTurkmenistantoChina,andin2016,thechangeinoneofthegascontractsfromRussiatoTurkey.In2022,theGOGsharerecovered,havingfallenbackin2021(whenthevolumeofOPEimportsinEuroperosesharplyinTurkeyandSpain,reflectingafasterincreaseindemandthanelsewhereinEurope).The2022recoveryreflectedapartialswitchawayfromOPEinTurkey’scontractswithGazprom.ThetotalvolumeofpipelineimportsdeclinedsharplyasRussianflowstoEuropedeclined–thisimpactedGOGvolumesmorebutthiswasoffsetbythechangeinTurkeytoleaveOPEandGOGshareslargelythesame.TheriseinGOGattheexpenseofOPEhasbeenentirelyintheEuropeanmarket(atleastuntil2015whentheUkrainebeganimportinggasfromEurope,ratherthanRussia–utilisingreverseflowmechanism),astheNorthwestEuropecountriesbeganswitchingtoGOGandmorerecentlytheCentralEuropecountriesand,in2014and2017,Italy.InrespectofpipelineimportsintoEurope,GOGin2022hasan82%sharecomparedto18%forOPE–in2021theGOGshareinEuropewas75%andOPE25%,withthechangein2022reflectingthechangesinTurkey.Thisisinmarkedcontrastto2005whenitwas91%OPEandonly7%GOG.Figure11FigurWeo9r-ldWPorrilcdePFroicremFaotriomna2t0io0n52t0o0250t2o22-0P2i2pe-lPinipeeIlminpeoIrmtsports100%80%60%40%20%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCWHOLESALEGASPRICESURVEY2023EDITION21Section3WorldResults3.4LNGIMPORTS3.4.12022SurveyResults–LNGImportsLNGFimiguproert1s0in-W20o2rl2daPcrcioceunFoterdmfaotriosnom20e2122-%LNoGftIomtaplowrtosrldconsumption–around488bcm10.Figure12WorldPriceFormation2022-LNGImportsGOG47%OPE53%LNGimportsaresplit53%OPEand47%GOG.TheregionalbreakdownisshowninFigure13below.OPEatsome259bcmismostlyAsiaPacific–Japan,KoreaandChineseTaipei,followedbyAsia–China,IndiaandPakistan–andEurope–mainlyFrance,Spain,Turkey,Portugal,ItalyandPoland.GOGtotalssome229bcmandcanbedividedintoimportsintotradedmarketsinNorthAmericaandcountriessuchastheUK,Belgium,FranceandNetherlands,wherethedomesticmarketpricingmechanismisGOG(withcontractslinkedtohubprices),andallothermarketswhicharemainlyimportingspotandshort-termpricedLNGcargoes,whichisalmosteveryotherLNGimportingcountry–Japantakingthelargestvolume–butalsoincludescountrieslikeChina,India,Korea,Turkey,Spain,ArgentinaandBrazil,plustheuncontractedspotLNGintothetradedmarketsnotedabove.InEurope,76%ofLNGimportsarenowGOG.10Asforpipelineimports,thefigurerepresentstotaleffectivenetLNGimportsforallcountries.GrossLNGimports(netofre-exportedLNG)weresome534bcmin2022,witharound46bcmbeingregasifiedandre-exportedaspipelinegas.AsubstantialamountofthiswasinEuropeasLNGbeingimportedwasre-routedtomarketswhichhadlostRussianpipelineimports.WHOLESALEGASPRICESURVEY2023EDITION22Section3WorldResultsFigure13RegionalPriceFormation2022-LNGImportsFigure11-RegionalPriceFormation2022-LNGImportsTotalMiddleEastAfricaFSULatinAmericaAsiaPaciﬁcAsiaEuropeNorthAmerica0%20%40%60%80%100%OPEGOGBIMNETRCSRSPRBCNP3.4.22005to2022Comparisons–LNGImportsThemainchangesinthefifteensurveysfrom2005to2022areariseinGOGfrom14%in2005to32%in2012,whichwaslargelyattheexpenseoftheOPEcategory,beforeitfellbackin2014to25%.In2015therewasarecoverybacktoa33%share,afallin2016to25%,beforerisingto29%in2017,34%in2018,41%in2019,44%in2020,46%in2021and47%in2022.TheGOGshareiscomprisedofLNGgoingtothetradedmarketsofNorthAmericaandinEuropetheUK,BelgiumandNetherlandsandanyhub-indexedLNGcontracts(suchasHenryHub),andspotLNGcargoestothemore“traditional”LNGmarketsinAsiaPacific,AsiaandEurope(includinguncontractedLNGintotradedmarkets)andsomeofthenewermarkets.TherewasasignificantincreaseinGOGbetween2005and2007,whichwasprincipallyduetoariseinspotLNGimportsinAsiaandAsiaPacificandasmallerriseinNorthAmericanimports.Since2007,therehavebeenoffsettingchangeswithNorthAmericanLNGimports–whichareallGOG–declining,Europeanimports,principallytotheUKincreasingin2009and2010andrelativelystabilityinAsiaandAsiaPacificspotLNGimports.In2012,asEurope’sLNGimportsdeclined,theseweremorethanoffsetintheGOGcategorybyrisingspotLNGimportsinAsiaandAsiaPacific.Thedeclinein2013reflectedthefallintheshareofspotLNGimportsandadeclineinLNGimportsintotheUK,theUSAandCanada.Thefurthersmalldeclinein2014wasprincipallyduetolowerspotLNGcargoesinAsiaandAsiaPacific,withcorrespondinglyhigherOPEunderlongtermcontracts.Thereboundin2015waslargelyduetomorespotLNGcargoesinallmarketsbutespeciallyJapanandthenewmarkets,asthefallinspotLNGpricesprecededthedeclineinoil-linkedcontractprices.In2016,thedeclineinGOGwasaconsequenceofLNGtradebecomingmorecontracted,withfewerspotLNGcargoes,whichbenefittedOPE.In2017thiswasreversedasspotLNGcargoesincreased,inpartduetotheriseinHenryHubpricedUSLNGexports.WHOLESALEGASPRICESURVEY2023EDITION23Section3WorldResults2018sawasignificantchangeinLNGimportsofallthesurveys,drivenbythecontinuedriseinHenryHubpricedUSLNGexportsbutalsobyageneralriseinspotLNGcargoes11.Thischangewasjustaslargein2019,risingtoover40%forthefirsttime,withthevolumeofOPELNGimportsdecliningforthesecondyearinarow.In2020,thegrowthofGOGslowedbutstillroseto44%.TheriseinGOGwasstrongestinAsiaandAsiaPacific,risingto46%(up5percentagepoints)and27%(up6percentagepoints)respectively.Theserisesoffsetafivepercentage-pointdeclineinEurope,largelyduetoaswitchtomoreOPEvolumesinSpainin2020.In2021,thetwo-pointriseinGOGlargelyreflectedalargeincreaseinspotLNGcargoestoLatinAmerica(Brazilmainly),AsiaPacificandChina.TherewasalsoaswitchawayfromOPEcargoestoGOGinEurope.2022sawsomesignificantchangesasLNGimportsincreaseddramaticallyintoEurope,replacinglostRussianpipelineimports.TheGOGshareinEuroperoseto76%in2022from67%in2021,withalargeriseinspotLNGcargoes.ManyofthesespotLNGcargoesweredivertedfromChina,wheretheGOGsharefellto27%in2022from49%in2021,andPakistan,wheretheGOGsharefellto17%in2022from41%in2021.FigureF1i4gureW12o-rlWdoPrrlidcePFriocremFaotrimona2ti0o0n52t0o0250t2o22-0L2N2G-LINmGpoImrtpsorts100%80%60%40%20%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCThevolumeofLNGgoingtothetradedmarketshadbeenindeclinesince2010,withthedeclineinUSLNGimports,reachingalowpointin2018asUKimportsalsodeclined.Incontrast,spotLNGcargoeshaveincreased,especiallyin2017and2018inAsiaPacific,AsiaandpartsofEuropeplusthenewerLNGimportingmarkets.However,in2019,thevolumeofLNGgoingtothetradedmarketsofNorthwestEuropeincreasedmarkedly,astheabundantsupplyofLNGsoughtahomeintheonlymarketabletoabsorbthesurplus,decliningonlyslightlyin2020.In2021,thetradedshareroseagainonthebackofcontractedUSLNGcargoesintoAsianmarketsespecially.In2022,spotLNGcargoesincreasedagainasEuropeoutbidotherregionsandmoppedupincreasinguncontractedLNGsupply.AsFigure15shows,thevolumeofspotLNGcargoeshaverisenalmostthreetimesinfiveyears,from63bcmin2016to171bcmin2022.10ThedefinitionofSpotLNGinthissurveyincludesspotcargoesandcontractsunderoneyear.ThismakesitdistinctfromthedefinitionusedbyGIIGNLintheirannualreport,forspotandshort-termtrades,whichincludedcontractsuptofouryears.LNGbeingimportedintothetradingmarketsofNorthAmericaandNorthwestEurope,isnowsplitbetweenSpotandTradedvolumes,toavoidthecategorisationofsomespotvolumesastradedvolumes.Inaddition,insomecountrieswehavealsoattemptedtocategoriseUScargoes,whicharespotandthoseundercontractswithHenryHublinkedpricing,whichwouldbeincludedinthe“Traded”category.WHOLESALEGASPRICESURVEY2023EDITION24Section3WorldResultsTofurtherillustratethegrowthofspotLNG,Figure16breaksdownthedatafromFigure14,showingSpotLNGseparatelyandthepercentageofSpotLNGintotalLNGimports.In2021,thespotLNGpercentagedeclined,forthefirsttimein5years,to34%in2021from35%in2020,withthegrowthinLNGtradebeinglargelyaccountedforbycontractedLNG–bothOPEandhub-indexed.In2022thiswasreversedasspotLNGheadedtoEurope.ThelatestGIIGNLannualreportstatedthatspotandshort-termLNGcontractswerearound35%oftotalLNGtrade–thesameastheestimatedmeasurefromthissurvey.GIIGNLalsonotedthat“true”spotvolumes(i.e,volumesdeliveredwithinthreemonthsfromthetransactiondate)reached28%oftotalimportsin2022–somewhatlowerthanthissurveyfigurebutwithadifferentdefinition.Figure1F5igureG1O3G-GLONGGLINmGpoImrtpso2r0t0s520to052t0o22022250200150BSCM%SpotLNG10050-200520072009201020122013201420152016201720182019202020212022GOGGOGTradedFigure16FigWuorreld14LN-WGoPrrlidceLFNoGrmPraitcieonFo2r0m05attioo2n022020-5Stpoo2t0L2N2G-SImpoptoLrtNsGImports100%40.0%80%30.0%60%20.0%40%10.0%20%0%2005200720092011201220132014201520162017201820192020202120220.0%OPEGOGtradedGOGspot%SpotLNGWHOLESALEGASPRICESURVEY2023EDITION25Section3WorldResultsFFigiguurere1715-GGOOGGSSppoottLLNNGGImImppoortrsts20200505toto20220222BSCM180160140120100806040200200520072009201020122013201420152016201720182019202020212022NorthAmericaEuropeAsiaAsiaPaciﬁcLatinAmericaFSUAfricaMiddleEastThegrowthofspotLNGimportspriorto2010,waspredominantlyintheAsiaPacificregion,withthegrowthinAsiastartingpost-2010.ThevolumeinEuropewasrelativelylowuntil2018,withtheGOGLNGimportsbeingmainlyintothetradedNorthwestEuropemarkets.TheriseinspotLNG,fromaround60bcmin2016toover150bcmby2020,waslargelyaconsequenceofthesurgeinUSLNGexports,althoughnotallthegrowthinspotLNGisfromtheUSA.Since2016,therehavebeenincreasingvolumesofspotLNGintotheAsianmarketsofIndiaandChina,especiallythelatter,andintoJapanandSouthKorea(AsiaPacific).SpotLNGintoEuropebegangrowingstronglyin2019,astherisingLNGsupplyfoundahomethere.SpotLNGintoChinareachedarecordofalmost50bcmin2021,butthismorethanhalvedin2022,withflatChinagasdemand,andthepullofEuropeforspotcargoes–wherespotvolumesof64bcmwerealmost40%oftotalLNGimportsintoEurope.AsiaPacificvolumesin2022roseslightlywithincreasesinSouthKorea,ChineseTaipeiandThailand,morethanoffsettingdeclinesinJapanandelsewhere.WHOLESALEGASPRICESURVEY2023EDITION26Section3WorldResults3.5TOTALIMPORTS3.5.12022SurveyResults–TotalImportsTotalimportsin2022accountedforsome27%oftotalworldconsumption–1,083bcm.TotalimportsarethesumofpipelineandLNGimportsandcomprisethethreecategoriesofGOG(56%),OPE(38%)andBIM(6%).Figure16-WorldPriceFormation2022-TotalImportsFigure18WorldPriceFormation2022-TotalImportsBIM6%GOG56%OPE38%Thetablebelowshowstheregionalandcategorybreakdowninvolumeterms.Table1WorldPriceFormation2022-TotalImportsREGIONTOTALIMPORTSNorthAmericaOPEGOGBIMTOTEuropeAsia0.0119.00.0119.0AsiaPacificLatinAmerica85.9341.00.0426.9FSUAfrica156.738.00.0194.7MiddleEastTotal146.273.00.0219.29.015.70.024.710.46.526.643.50.24.28.413.34.65.231.641.4412.9602.766.61,082.7WHOLESALEGASPRICESURVEY2023EDITION27Section3WorldResults3.5.22005to2022Comparisons–TotalImportsTotalimportshaveonlycomprisedthreecategories–OPE,GOGandBIM–inallfifteensurveysfrom2005to202212.Aswellasthefigurethetablebelowshowsthevolumebreakdown.OPEdeclinedfrom63%in2005to59%in2007asGOGrosefromjustover21%to28%andthenin2009,OPEgainedsharerisingto66%asBIMfellfrom14%to6%,withGOGrisingto29%.Since2009OPEhaslostsharebyaround27percentagepointsandGOGgainedasimilarshare,inlargepartduetopipelineimportsinEurope,butmorerecentlytherisingshareofGOGinLNGimports.Involumeterms,overtheperiod2005to2021,OPEpricingdeclinedby17%whileGOGgrewby260%.Itshouldbenotedthattotalimportsfellinvolumetermsin2022,asaresultofthelowerRussianpipelineimportsintoEurope,butoverall,thesharesofOPEandGOGintotalimportswerenotthatmuchchanged.Figure17-WorldPriceFormation2005to2022-TotalImportsFigure19FiguWreo1rl7d-PWriocreldFPorrimceaFtioornm2a0ti0o5nt2o002502to22–0T2o2t-aTloImtaploImrtpsorts100%2005201020152016201720182019202020212022100%200520102015201620172018201920202021202290%90%80%80%70%70%60%60%50%50%40%40%30%30%20%20%10%10%0%0%OPEGOGBIMNETRCSRSPRBCNPOPEGOGBIMNETRCSRSPRBCNPTable2WorldPriceFormation2005to2022–TotalImports(bcm)TOTALIMPORTSWORLDOPEGOGBIMTOT2005500.0165.6128.6794.22007496.0234.8118.3849.12009532.6235.545.1813.32010562.2912.52012524.9297.652.5938.72013516.9948.42014461.4354.958.7904.92015432.7943.32016475.5370.860.5999.02017484.01064.52018467.8383.959.21081.62019448.31098.92020424.1449.560.61083.92021467.01179.02022412.9471.751.71082.7527.852.5555.457.9587.762.5594.265.1643.867.7602.766.610ApartfromtheverysmallRCSontheNigeriatoGhanapipelinesince2010.WHOLESALEGASPRICESURVEY2023EDITION28Section3WorldResults3.6TOTALCONSUMPTION3.6.12022SurveyResults–TotalConsumptionTotalconsumptionin2022wasaround4,082bcm.Figure20WorldPriceFormation2022–TotalConsumptionFigure18-WorldPriceFormation2022-TotalConsumptionRBC6%NP0%OPE18%RSP13%RCS9%NET0%BIM3%GOG51%GOGhasthelargestshareat51%,totalling2,076bcm,dominatedbyNorthAmericaat1,126bcm,followedbyEuropeatsome409bcm,theFormerSovietUnionat254bcm,andAsiaPacificandAsiaat111and93bcmrespectively.InallGOGcannowbefoundin66markets,inoneformoranother,andinallregions.TheOPEshareat18%,totals714bcmandispredominantlyAsia(331bcm),AsiaPacific(229bcm)andEurope(87bcm).OPEiswidespreadalsobeingfoundin49markets,includingtwo-thirdsofthecountriesinEurope(althoughmostatverysmallpercentages),andinallregionsexceptNorthAmerica.Theregulatedcategories–RCS,RSPandRBC–accountintotalforsome28%,around1,139bcm:•RCStotalssome373bcmandisin14countries,mainlytheFormerSovietUnion(RussiaandAzerbaijan)andAsia(ChinaandBangladesh),followedbyAfrica(EgyptandNigeria)andLatinAmerica(Argentina);•RSPtotalssome546bcmandisin22countries,withtheMiddleEastdominating–Iran,SaudiArabia,UAEandOman–followedbytheFormerSovietUnion–RussiaandUkraine–andLatinAmerica–Argentina,BoliviaandPeruwithsomeinAsiaPacific–Indonesia;•RBCtotalssome221bcmandisin15countries,mainlytheFormerSovietUnion–Kazakhstan,TurkmenistanandUzbekistan,Africa–EgyptandAlgeria–andLatinAmerica–Venezuela.WHOLESALEGASPRICESURVEY2023EDITION29Section3WorldResultsTheBIMshareat3%totalssome133bcmandisin24countries,predominantlyMiddleEast–Qatar,UAE,IsraelandIraq,andtheFormerSovietUnion–incountriesimportingfromRussia.TheNETshareatlessthan1%totalssome11bcminjust1country–Trinidad.TheNPshareatlessthan1%totalssome9bcmin7countries,largelyMexicoandBrunei,whereitisusedintheenergyindustryinrefiningprocessesorenhancedoilrecovery.ThetablebelowshowstheregionalandcategorybreakdownfortotalworldconsumptionandFigure21theregionalbreakdowninpercentageterms.Table3WorldPriceFormation2022–TotalConsumptionREGIONOPETOTALIMPORTSTOTNorthAmerica0.0GOGBIMNETRCSRSPRBCNP1,129.7Europe86.7498.0Asia331.01125.80.00.00.00.00.03.9494.5AsiaPacific229.4388.0LatinAmerica29.4409.40.00.00.01.90.00.0148.0FSU10.4713.4Africa3.993.44.30.064.40.21.10.0160.8MiddleEast23.5111.34.4549.8Total714.241.55.20.00.140.00.02.84,082.211.414.329.615.41.1253.626.60.0253.469.0100.40.018.112.90.031.64.688.80.922.779.20.09.0400.215.10.12,076132.611.4372.8545.5220.88.9Figure21RegionalPriceFormation2022–TotalConsumptionWHOLESALEGASPRICESURVEY2023EDITION30Section3WorldResultsThemapbelowshowsthemainpriceformationmechanismbymarket.Foreachmarketthehighestshareisusedtocategorisethedominantpriceformationmechanismforthatmarket.OPEandGOGareself-explanatory,regulatedcoversthe3categoriesRCS,RSPandRBC,whileOtherispredominantlyBIMthebilateralmonopolycategory.Figure22WholesalePriceFormationMechanismsMapGREENLANDICELANDFINLANDSWEDENNORWAYRUSSIACANADAESTONIAUNITEDKINGDOMDENMARKLATVIALITHUANIAIRELANDPOLANDBELARUSNETHERLANDSGERMANYBELGIUMCZECHREPUKRAINESWITZERLANDFRANCESLOVAKIAKAZAKHSTANPORTUGALAUSTRIAHUNGARYMOLDOVAMONGOLIASLOVENIAROMANIAMONACOCROATIASERBIAGEORGIAUZBEKISTANKYRGYZSTANMONTENEGROBULGARIAUNITEDSTATESSPAINITALYALBANIAARMENIAAZERBAIJANNORTHKOREASOUTHKOREAMALTAGREECETURKEYTURKMENISTANTAJIKISTANJAPANTUNISIABOSNIA&CYPRUSSYRIAAFGHANISTANCHINAALGERIACHINESETAIPEIHERZOGOVENIALEBANONIRAQIRANKONGMOROCCOPALESTINIANTERRITORYJORDANPAKISTANPHILIPPINESKUWAITCUBAISRAELNEPALBHUTANJAMAICABAHRAINLIBYAEGYPTHAITIWESTERNSAHARAUAEBANGLADESHDOMINICAREPUBLICQATARINDIAMEXICOMAURITANIASAUDIARABIAMYANMARLAOSHONGBELIZESENEGALGUATEMALAPUERTORICOTHEGAMBIAMALINIGERCHADSUDANOMANTHAILANDVIETNAMHONDURASTRINIDADANDTOBAGONIGERIAERITREAYEMENNICARAGUABURKINACENTRALSOUTHCAMBODIAFASOAFRICANSUDANDJIBOUTIELSALVADORVENEZUALAGUYANAGUINEA-BISSAUBRUNEICOSTARICACOLOMBIAPANAMASURINAMEGUINEAETHIOPIAFRENCHGUIANASIERRALEONECAMEROONREPSOMALIASRILANKAMALAYSIALIBERIACONGOUGANDAPAPUANEWGUINEACOTED’IVOIREKENYAGHANAECUADORTOGOEQUATORIALRWANDAGUINEADRCONGOTANZANIABURUNDIBENININDONESIAPERUBRAZILGABONTIMOR-LESTEANGOLAMALAWIZAMBIAMOZAMBIQUEBOLIVIAZIMBABWENAMIBIABOTSWANAMADAGASCARPARAGUAYAUSTRALIAESWATINIWholesalegasprices2022CHILEURUGUAYLESOTHOSOUTHAFRICAGasongascompetitionARGENTINAOilpriceescalationRegulatedNEWZEALANDOtherEuropeisnowalmostallGOG,withevenSpainhavingmoreGOGthanOPE.TurkeyisstillcategorisedasOPEbutnow,withthechangeinpricingintheGazpromcontracts,itonlyjustexceedsGOG.82%ofEuropeisnowGOG,almostalldomesticproductionis,and82%ofpipelineimportsand76%ofLNGimportsareGOG.OPEisstillthelargestcategoryinmostAsiancountries,eventhosesuchasMalaysia,VietnamandthePhilippineswhereitismostlydomesticproduction.ThereisalargeareaoftheworldcoveringtheFormerSovietUnion,theMiddleEastandNorthAfricawherepricesremainlargelyregulated.WHOLESALEGASPRICESURVEY2023EDITION31Section3WorldResults3.6.22005to2022Comparisons–TotalConsumptionThefigurebelowshowsthechangesinthepriceformationmechanismsoverthefifteensurveysfrom2005to2022.FigurFeig2u3re1W-WorolrdldPrPircieceFoFromrmataiotinon20200505toto20220222-T-oTtoatlaCloCnosnusmumptpiotnion100%80%60%40%20%0%2010201520162017201820192020202120222005OPEGOGBIMNETRCSRSPRBCNPThechangesbetweeneachsurveycanbesummarisedasfollows:•Between2005and2007,GOGincreaseditssharebysome2percentagepointsandOPEdecreasedby2percentagepointsreflectingfastergrowthinconsumptioninNorthAmericathanmostotherregions,aswitchfromOPEtoGOGinEurope,andtoalesserextentinAsiaPacificandAsia,andaverysmallmovefromregulatedpricingtoGOGinRussiaandLatinAmerica.RSPalsoincreaseditssharebyhalfapercentagepointreflectingmorerapidgrowthinconsumptionintheRSPcountries;•Between2007and2009,GOGincreaseditssharebyafurther4percentagepoints,atatimewhentotalworldconsumptionshowedlittlechange,mainlybecauseofthechangeinRussiafromRBCtoGOGbutalsobecauseofthecontinuingswitchfromOPEtoGOGinEurope.OPEactuallygained1percentagepointwiththelossinshareinEuropebeingmorethanoffsetbyaswitchfromBIM,whichlost2percentagepointsoverall,toOPEinintra-FSUtrade.Theothermajorchangewasthedeclineof14percentagepointsinRBCandasimilargaininRCS,mainlyinRussia,butRCSalsogainedattheexpensesofRSP,whichlostalmost2percentagepoints,asChina’sdomesticproductionchangedcategoriesaspricesincreasedasaconsequenceofregulatorychange;•Between2009and2010,GOGincreaseditssharebyanother3percentagepoints,withthecontinuingswitchfromOPEtoGOGinEuropeandfurthermoveinRussiaawayfromRCStoGOG.OPEdeclinedbyjustunderonepercentagepointwithlossesinshareinEuropebeingpartlyoffsetbygainsinsharesinAsia,asChinabeganimportingpipelinegasandmoreLNGundercontract,andAsiaPacificonthebackofrapidgrowthindemandinKorea,TaiwanandThailand;WHOLESALEGASPRICESURVEY2023EDITION32Section3WorldResultsTable4WorldPriceFormation2022–TotalConsumption(bcmand%tages)WORLDTOTALCONSUMPTIONTOTOPEGOGBIMNETRCSRSPRBCNP20052860.82007690.7896.9166.616.622.9325.2718.723.13049.22009672.41017.0158.118.922.4363.3775.121.93050.32010698.61142.993.018.9431.6298.6345.021.73320.92012729.41342.2101.722.5419.1294.4388.922.73446.02013669.01417.8124.923.9477.7481.7229.621.53491.92014651.31514.6144.719.9419.4494.6226.021.43490.22015611.81509.6146.419.4385.7585.0209.722.53537.72016639.41608.9150.118.8359.3554.3186.220.73629.52017722.81653.6142.517.3353.3540.7181.617.83733.62018737.61737.4128.413.0386.8516.5199.614.33919.12019749.81868.5135.213.5408.6522.7206.913.83994.22020743.21942.2138.213.8412.8524.2210.79.13907.62021723.71938.3137.011.9354.4530.8202.19.44120.02022777.82035.8136.211.9364.8564.0220.98.74082.2714.22076.0132.611.4372.8545.5220.88.9200524.1%31.4%5.8%0.6%0.8%11.4%25.1%0.8%100.0%20070.6%100.0%200922.1%33.4%5.2%0.6%0.7%11.9%25.4%0.7%100.0%20100.7%100.0%201222.9%37.5%3.0%0.7%14.1%9.8%11.3%0.7%100.0%201322.0%40.4%3.1%0.6%12.6%8.9%11.7%0.7%100.0%201419.4%41.1%3.6%0.6%13.9%14.0%6.7%0.6%100.0%201518.7%43.4%4.1%0.5%12.0%14.2%6.5%0.6%100.0%20160.5%100.0%201717.5%43.3%4.2%0.3%11.1%16.8%6.0%0.6%100.0%201818.1%45.5%4.2%0.3%10.2%15.7%5.3%0.6%100.0%20190.3%100.0%202019.9%45.6%3.9%0.3%9.7%14.9%5.0%0.5%100.0%20210.3%100.0%202219.8%46.5%3.4%0.3%10.4%13.8%5.3%0.4%100.0%19.1%47.7%3.5%10.4%13.3%5.3%0.4%18.6%48.6%3.5%10.3%13.1%5.3%0.2%18.5%49.6%3.5%9.1%13.6%5.2%0.2%18.9%49.4%3.3%8.9%13.7%5.4%0.2%17.5%50.9%3.2%9.1%13.4%5.4%0.2%WHOLESALEGASPRICESURVEY2023EDITION33Section3WorldResults•Between2010and2012,GOGincreaseditssharebyalmostonepercentagepoint,risingto41%,withthecontinuingincreaseinshareinEuropeawayfromOPE,andmorespotLNGimportsinAsiaandAsiaPacific,beingpartlyoffsetbyadeclineinshareinRussia.OPEdeclinedby2.5percentagepoints,basedontheswitchtoGOGinEurope(andtoBIMinTurkey,asacontractchanged)coupledwithdecliningEuropeandemand,onlypartlyoffsetbyarisingshareinpipelineimportsinChina.RCSincreaseditsshareby1percentagepoint,principallyinRussiabutalsoasdemandgrewsharplyinChina.RSPincreaseditsshareby5percentagepoints,principallyduetothechangeinpricinginIranandrisingdemandinSaudiArabia.RBCdeclinedbyasimilaramount,reflectingtheIranpricingchange.•Between2012and2013,GOGincreaseditssharebyover2percentagepoints,gainingfromOPEaspricingmechanismscontinuedtoswitchinEurope,andfromRCSinRussiaastheindependentproducersrecoveredmarketshare.OPEdeclinedbyanotheronepercentagepointreflectingthechangesinEurope,partlyoffsetbyasmallgainintheLNGimportsegmentwithspotLNGtradedeclining,andinChinawiththenewpricingregimeintwoprovinces.RCSdeclinedby1.5percentagepoints,largelyreflectingthechangeinRussiatowardsGOGandinChinatoOPE.TheBIMcategoryregainedalmosthalfapercentagepointinsharereflectingdomesticproductiongrowthinQatar.•Between2013and2014,theGOGsharedeclinedmarginallyasthecontinuedswitchawayfromOPEinEuropeandmorerapidconsumptiongrowthinNorthAmericawasoffsetbyadeclineintheshareofGOGinRussiatowardsregulatedpricing,andfewerspotLNGcargoes.OPEwasdownjustunder1percentagepointreflectingthechangesinEurope,partlyoffsetbyanincreaseinChina.RCSwasdownby1percentagepointlargelyasaresultoftheswitchtoRSPinRussiaandtheRSPcategorywasupby2.5percentagepoints,reflectingtheRussiaswitchbutalsoachangeinNigeriaaswell,awayfromRBC,coupledwithmorerapidconsumptiongrowthinRSPcountries.RBCwasunchanged,withthedeclineinNigeria,beingoffsetbyrisingconsumptiononKazakhstan,TurkmenistanandUzbekistan.•Between2014and2015,theGOGshareincreasedbyover2percentagepointsreflectingrisinggasconsumptioninNorthAmericaandEurope,togetherwiththecontinuingmoveawayfromOPEinEurope,thechangeinpricinginIndiaandmorespotLNG,partlyoffsetbyadeclineinAustraliaasOPEnetbackcontractsbegantobeintroduced,andtheswitchinUkrainetoimportsofhub-pricedgasfromEurope.OPE’sshareincreasedbyjustoverhalfapercentagepoint,withthedeclineinEuropeandlowershareofLNGimportsbeingmorethanoffsetbythechangeinthedomesticpricingmechanisminChina.TheRCSsharedeclinedbyonepercentagepointreflectingthechangesinChina,partlyoffsetbymovestoRCSinEgyptandNigeria.RSPwasdownbyonepercentagepoint,principallyreflectingthechangesinpricinginIndiaandNigeria.RBCwaslowerbyalmost1percentagepoint,reflectingmovesawayinBangladeshandpartiallyinEgypt.•Between2015and2016,theGOGsharerosebymarginally,withanincreaseintheshareinEuropeandtheFormerSovietUnion,togetherwithgrowingconsumptioninNorthAmerica,beingpartlyoffsetbydeclinesinAsiaandAsiaPacific,reflectingfewerpurespotLNGcargoes.TheOPEshareincreasedbyjustunder2percentagepoints,reflectingasmallriseinEuropeattheexpenseofBIM(inTurkey),butprincipallyinAsiaandAsiaPacific,astheshareinLNGimportsincreased,butalsoreflectingariseindomesticproductioninChina,asthefullyeareffectofthechangeincity-gatepricingcamethrough,andchangeddomesticproductionpricinginKuwait.TheRCSsharedeclinedbyhalfapercentagepoint,principallyreflectingthechangesinChina,partlyoffsetbyariseinIranWHOLESALEGASPRICESURVEY2023EDITION34Section3WorldResultsingasasafeedstocktopetrochemicals,andfasterconsumptiongrowthinsomecountrieswithRCSpricing.TheRSPsharewasdownbyjustunderonepercentagepointasaresultofdeclinesintheMiddleEast–IranandKuwait–andtheFSU,principallyinRussiawithswitchingtoGOGandRCS.TheRBCsharewasdownveryslightlyonslowerconsumptiongrowth.•Between2016and2017,theGOGshareincreasedby1percentagepointasaresultofacontinuingriseinEurope,attheexpenseofOPE,theriseinAsiaasChinaintroducedmarketpricingfordirectsalesfromupstreamproducerstolargeusers,thegeneralrecoveryinspotLNGcargoes.TheOPEsharewasalmostunchanged,withthelossestoGOGbeingpartlyoffsetbyanincreaseinAsiaPacific,mainlyinMalaysiaandIndonesia.TheBIMsharewasdownalmosthalfapercentagepointreflectingtheswitchinIndonesiatoOPE.TheRCSshareincreasedbyoverhalfapercentagepoint,largelyasaresultofthechangeinMalaysiaawayfromRSP,whichwasdownalmostonepercentagepoint.RBCwasbroadlyunchanged.•Between2017and2018,theGOGsharerosebyonepercentagepointlargelyreflectingtheincreasingshareofspotLNGcargoesinLNGimportsandrapidlygrowingUSconsumption,morethanoffsettingthedecliningshareinpipelineimports,asaresultofreducedEuropeanpipelineimportsandincreasedChinapipelineimports.OPEsharedeclinedbyhalfapercentagepoint,withthelossinLNGimportsbeingpartlyoffsetbygainsinpipelineimportsanddomesticproductioninChina.RCSwaslargelyunchangedbutRSPdeclinedbyaquarterofapercentagepoint,reflectingslowerconsumptiongrowthincountrieswithRSPandaswitchawayinArgentinatoRCS.InturnRCSlostshareinChinatoOPE.•Between2018and2019,theGOGsharerosebyonepercentagepoint,attheexpenseofOPE,largelyasaresultofrisingGOGinLNGimports–bothtradedmarketsandspotLNGcargoes–andamorerapiddeclineinOPEpipelineimportsinEurope.RCSwasdownbyhalfapercentagepoint,whileRSPdeclinedbyaquarterofapercentagepoint,adeclineinRussiaandUkraine.RBCrosemarginallyasTurkmenistaneliminatedfreegasbutstillmaintainedsubsidies.•Between2019and2020,theGOGsharerosebyanotheronepercentagepoint,largelydrivenbyrisingspotLNGimports,attheexpenseofOPE,togetherwithrisingsharesindomesticproductioninRussiaandIsrael.OPEgainedslightlyindomesticproductioninChinaandMalaysia.RCSdeclinedbyonepercentagepointreflectingthechangesinMalaysia.RSPgainedslightlyinIndonesia.•Between2020and2021,theGOGsharewasdownmarginallywitharisingshareinLNG(tradedmarketsandhub-indexedcontracts)andadeclineinpipelineimports,largelyreflectingrapiddemandgrowthinTurkeyandaswitchmorepipeimportsintoSpain,withlowerLNGimports,plusmorepipelinegasintoChinafromCentralAsiaandRussia.Asaconsequence,theOPEshareroseslightly.TheRSPsharealsorosereflectingincreasingdemandgrowthinIndonesiaandtheMiddleEast.•Inthedramaticallychangedglobalmarketof2022,theGOGshareroseagainby1.5percentagepoints,mostlyattheexpenseoftheOPEshare,risingtoover50%ofglobalgasconsumptionforthefirsttime.TherewasasignificantriseintheGOGshareinEuropeasspotLNGimportsincreasedsharplyandassomeofTurkey’scontractedpipelineimportsfromRussiaswitchedtohubpricingawayfromoilindexation.Inaddition,thepricingofpipeimportsintoTunisiachangedtoGOGfromOPE.SpotLNGimportsalsoroseinSouthKoreaandChineseTaipei,andrisingWHOLESALEGASPRICESURVEY2023EDITION35Section3WorldResultsconsumptioninRussiaaddedtoGOG.Takentogether,thesemorethanoffsetthedeclineinGOGinAsiaasChinaandPakistanreducedspotLNGimports.TheOPEshareat17.5%isnowbackequaltoitslowesteverlevelpreviouslyreachedin2014,althoughtheOPEvolumeincreasedby100bcm.Overall,overthe2005to2022period,OPEhasdeclinedby6.5percentagepoints,GOGhasrisenby19.5percentagepoints,BIMhasdeclinedby2.5percentagepoints,RCShasrisenby8percentagepoints,RSPrisenby2percentagepointsandRBCdeclinedby20percentagepoints.Forthefirsttime,theglobalGOGshareisabove50%.Intermsofabsolutevolumes,OPEincreasedbysome100bcm,andGOGby1,150bcm–a130%increase.BIMandNETwerealsodownslightly.Theregulatedcategoriesintotalsawtheirvolumeincreasebyjustover100bcm.Globalgasconsumptionin2005wassome2,860bcmandhadrisento4,082bcmby2022,anincreaseofsome1,122bcm,slightlylessthantheriseinthevolumeofGOGoverthesameperiod.Effectively,alltheriseinglobalgasconsumptionbetween2005and2022,hasbeenmatchedbyrisingGOGconsumption,althoughthathidesthefactthatconsumptionhasrisenstronglyinmanycountrieswithheavilyregulatedmarkets,suchasintheMiddleEast,andthattherehavebeensignificantchangestowardsGOGinothermarkets,notablyinEurope,andinLNGmarketsinAsiaandAsiaPacific.Whiletherehavebeenanumberofsignificantchangesovertheperiodofthesurveysbetweenthe8categories,asdescribedabove,thechangeshavebeenalmostwhollywithinlargergroupingsofcategories,untilveryrecently.ThecategoriesofOPE,GOG,BIMandNETcanbebroadlydescribedas“market”pricing,whilethecategoriesofRCS,RSP,RBCandNPcanbebroadlydescribedas“regulated”pricing.Thefigurebelowcomparesthechangesinthe“market”and“regulated”categoriesoverthefourteensurveys.FiguFriegu24re22M-MarakrekteatnadnRdeRgeugluatlaetdePdrPicriincgin2g020050t5ot2o022022280%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022MarketRegulatedWHOLESALEGASPRICESURVEY2023EDITION36Section3WorldResultsThetotalof“market”pricingrosefrom62%in2005to72%in2022,mirroredbyadeclinein“regulated”pricing,from38%in2005to28%in2021.Changesinpercentagesbetweensurveyscanarisebecauseofactualchangesinpriceformationmechanismorbecauseofmorerapidgrowthinconsumptionincountrieswithaspecifictypeofpriceformationmechanism.Theswitchto“market”pricingisdowntothefollowing:•ThemoveawayfromregulatedpricingintheRussianmarkettoGOGastheindependentproducersbegantocompetewitheachotherandGazpromtosellgastothepowersectorandlargeindustrials–thiswaspartlyreversedin2014withmore“regulated”pricing;•AsimilarmoveinArgentina,toGOG,astheeligiblemarketopenedup,andmorerecentlyinNigeria;•Thechanges,since2013,inChinawheretherewasinitiallyamovetoOPEin2provincesawayfromRCSwhichin2014becamenationwideforincrementalproductionover2012levelsandthenin2015forallsectorsexceptresidentialandfertilizers–someofthisOPEin2017switchedtoGOG–andhalfwaythrough2018themovetoOPEforresidentialcity-gatepricing.In2020,MalaysiamovedawayfromRCStoOPEinitsdomesticpricing;•ThepricingreformsinIndia,whichbeganinlate2014,movingpricingawayfromRSPtoGOG;and•TheriseinnewLNGimporters,importingatOPEand/orGOG,toenhanceorreplacedomesticproductionwhichwasregulated.3.7ANALYSISOFGAS-ON-GASCOMPETITIONANDOILPRICEESCALATION3.7.1Gas-on-GasCompetitionTheriseinGOGfrom31%oftotalworldconsumptionin2005to51%in2022andinwhichregions,hasbeendiscussedinsomedetailabove.IthasbeennotedearlierthatGOGisnotonehomogeneouscategoryandcanbeconsideredtocomprisethefollowingtypesofpricingmechanisms:•Trading–whatisgenerallythoughtofasGOGwherethepriceisdeterminedbytheinterplayofsupplyanddemandandistradedoveravarietyofdifferentperiods(daily,monthly,annuallyorotherperiods).Tradingtakesplaceatphysicalhubs(e.g.HenryHub)ornotionalhubs(e.g.NBPintheUK).Thiswillalsoincludelongertermcontractsintomarketswherethereislittleornotradingathubs,butwherethepriceislinkedtohubpricesinmarketswherethereisliquidtrading.•Bilateral–thereisnotradingmarketorhubbuttherearemultiplebuyersandsellers–distinguishingthisfromBIM–providingthecompetitiveelement.ThisislargelyinpartsofAustralia,Russia,ArgentinaandnowChina.Inmanyofthesemarkets,theGOGpricingwillbeinfluencedbysignificantregulatedsegments.•SpotLNG–spotLNGcargoeswherethepriceofthecargoesreflectsthecurrentsupply-demandsituation.WHOLESALEGASPRICESURVEY2023EDITION37Section3WorldResultsThefigurebelowbreaksdowntheGOGpercentagesoverthefifteensurveysintothese3categories.Figure25FigurCeh2a3n-gCehsainngGesOinGGinOTGobtyalTCyopens2u0m05pttoio2n02b2y(1T6y)pe2005to20221355%50%45%40%35%30%25%2005201020152016201720182019202020212022TradingSpotLNGBilateralTheTradingcategoryisbyfarthelargest–dominatedbyNorthAmericaandincreasinglyEurope–andhasincreasedfrom30%oftotalworldconsumptionin2005to38%in2021–ariseof8percentagepoints.TheBilateralcategoryhasrisenfrom1.1%to8.4%-ariseof7.3percentagepoints,whiletheSpotLNGcategoryhasrisenfrom0.2%to4.2%-ariseof4percentagepoints.ThetotalriseinGOGbetween2005and2022hasbeen19.5percentagepoints.Overtheperiodasawhole,40percentoftheriseinGOGhascomefromtheBilateralcategoryandislargelyinRussiatogetherwithmuchsmallerchanges,involumeterms,inArgentinaand,latterly,Australia,Israel,NigeriaandChina.TheriseintheTradingcategoryisalmostentirelyduetochangesintheEuropeanmarket,bothintermsofincreasedtradingvolumesandcontractrenegotiations.Thiswassupplementedattheendof2014indexationtohubpricesinIndia,awayfromRSPfordomesticproduction,in2019byrisingLNGimportsintoEurope,andin2021byincreasedhub-indexedLNGcontracts.ThechangesintheSpotLNGcategoryhavebeenvariableovertimereachingapeakof2.2%in2012beforefallingbackin2013and2014asthenumberofspotLNGcargoesdeclined.Thesharethenreboundedin2015,asspotLNGcargoesrecovered,declinedagainin2016asLNGtradebecamemorecontracted,followedbysharpreboundsinthefouryearsto2020,beforeaslightfallin2021,butthenariseagainin2022asspotLNGtoEuropeincreasedsharply.3.7.2ChangeinGOGandOPEbyConsumptionCategoryIntermsofthethreedifferentcategoriesofconsumption–domesticproduction,pipelineimportsandLNGimports,thefigurebelowshowsthechangesinGOGoverthefifteensurveys.13Inordertoemphasisechangestheverticalaxisstartsat25%.WHOLESALEGASPRICESURVEY2023EDITION38Section3WorldResultsFigure2Fi6gureC24ha-nCgheasnginesGiOnGGObGybCyonCosunmsupmtpiotnioCnaCtaetgeogroyry22000055ttoo22002222100%80%60%40%20%0%200520072009201020122013201420152016201720182019202020212022DomesticproductionPipeimportsLNGimportsApartfromtheriseindomesticproductionsharebetween2007and2010,asaresultofthechangesinRussiaand,toalesserextent,inEurope,theshareofGOGhasbeenrelativelystable.Similarly,theshareinLNGimportshasalsonotchangedmuchsince2007,fluctuatinglargelyinresponsetochangesinspotLNGcargoes,untiltheincreasesinthelastfiveyears.Thebigrisehasbeeninpipelineimports,almostallinEurope,althoughthathaslevelledoffsince2017,andevendeclinedslightlyin2021beforerecoveringin2022,withtheriseinLNGimportsdrivingtheoverallriseinGOG.Figure2F7igureC2h5a-nCgheasnginesOiPnEObPyECboynCsounmsupmtipotnioCnaCtaetgeogroyry2020055ttoo22002222100%80%60%40%20%0%200520072009201020122013201420152016201720182019202020212022DomesticproductionPipeimportsLNGimportsWHOLESALEGASPRICESURVEY2023EDITION39Section3WorldResultsThesimilarchartforchangesinOPE,isthemirrorimageoftheGOGchartforLNGimports,andforpipelineimports.Fordomesticproduction,thesharedeclinedcontinuouslyfrom2005to2013,principallydowntothechangesinEurope,beforerecoveringbysome3.5percentagepointsthroughto2016,principallyreflectingthepricingchangesinChinaand,toalesserextentinAustraliaandVietnam.OPEpipelineimportspickedupin2021,reflectingtherapiddemandgrowthinTurkeyandSpainandincreasedpipeimportsintoChinafromCentralAsiaandRussia,butfellbackagainin2022,asTurkeyswitchedawayfromOPEinitsRussiangascontracts.3.7.3WherearethemainOPEareas?Asnotedearlier,theshareofOPEhadfallento17.5%oftotalworldconsumptionin2022,from24.1%in2005.Involumeterms,however,therewasanincreaseto714bcmfrom697bcmin2005.Totalworldconsumptiongrewby43%overthesameperiod–some1,122bcm.Outofthe714bcmin2022,some301bcmwasdomesticproduction,154bcmwaspipelineimportsand259bcmLNGimports.Domesticproductionhasgrowninvolumetermssince2005,butthesharein2021wasonly1percentagepointabovethesharein2005–seefigure24above.Pipelineimportshadfallensharplyinvolumeterms,asaresultoftheshiftawayfromOPEinEurope,whileLNGimportsgrewinvolumeterms,withthesharedecliningasalreadydiscussed.42%ofOPEin2022wasindomesticproduction,and,asshowninthefigurebelow,ofthis47%isinChina.ItismainlyintheAsiaandAsiaPacificregions.Thecategorisation,insomecountries,asOPEisnotnecessarilyasclearasthefamiliaroilindexationinbothpipelineimportsandLNGimports,andthereisoftenanoverlayofregulationinvolved.Chinaisagoodexampleofthis,wherecity-gatepricesfromdomesticproductionhavebeenverybroadlylinkedtoliquidfuelspricesforanumberofyears,butthedecisiontochangethesepriceshasbeenoverseenbythestate.IfChinacontinueswithpricingreforms,thenthiselementofdomesticproductioncouldchangetoadifferentcategory–possiblyGOG–butagainthiswouldbeaverydifferentGOGfromthatseenintheNorthAmericanandEuropeantradingmarkets14.FiguFrigeu2re826-OOPPEEDDoommesetsictiPcrPordoudctuiocntionPhilippines1%Myanmar1%Other2%Vietnam3%Australia3%Kuwait6%Brazil7%China47%Thailand8%Pakistan9%Malaysia13%13AsforRussiawherethelargeGOGcategoryisverydifferentfromEuropeanGOG.WHOLESALEGASPRICESURVEY2023EDITION40Section3WorldResultsPipelineimportsarethemoretraditionaltypeofoilindexation,seeninitiallyinEuropebutnowmostlyreplacedtherebyGOG.ChinaisthelargestOPEpipeimporter,withimportsfromCentralAsia,Myanmarand,sincetheendof2019,fromRussia.InAsiaPacific,ThailandandSingaporeimportsarealsoOPE,whileinEurope,Turkey,ItalyandSpainarethelargestOPEimporters,withsmallervolumesinGermany,whileOtherEuropeislargelySoutheastEurope,includingGreece,andtheBalticcountries.WhiletheshareofOPEinLNGimportshasfallensignificantlysince2016,asGOGhasrisen,itstillrepresentsthemajorityofLNGimports.Outofthe259bcmin2022,some195bcm(or75%)wasintheBig5Asianmarkets–Japan,China,SouthKorea,ChineseTaipeiandIndia.TherestoftheAsiaandAsiaPacificregionsaddedanadditional28bcm(orsome1%)–halffromPakistanandThailand.Spain,FranceandTurkeyinEuropeaccountedforsome23bcm.Kuwait,Italy,Portugal,Poland,GreeceandJordanalsohaveOPELNGimports.Figure27-OPEPipelineImportsFigure29OPEPipelineImportsOtherEurope8%Other3%Hungary2%Germany2%ChinaHongKong3%Singapore4%Brazil4%China47%Thailand4%RussianFederation6%Italy10%Other7%Turkey14%Figure28-OPELNGImportsJapan25%Figure30OPELNGImportsOtherASandAP3%Bangladesh2%Pakistan3%Thailand3%Spain3%France4%India6%ChineseTaipei6%China24%SouthKorea14%WHOLESALEGASPRICESURVEY2023EDITION41Section1Section4WholesalePriceLevelsWHOLESALEGASPRICESURVEY2023EDITION42Section4WholesalePriceLevels4.1INTRODUCTIONThissectioncoversthefullresultsandanalysisonwholesalepricelevelsattheoverallWorldlevelandcomprises:•Theresultsforthe2022survey;and•Comparisonsacrossthefifteensurveys.Inconsideringwholesalepricelevelsacrossregions,markets,orpriceformationmechanisms,itshouldbenotedthatthewholesalepricecancoverdifferentpointsinthegaschain–wellheadprice,borderprice,hubprice,city-gateprice–sothecomparisonofpricelevelsisnotalways“likeforlike”.Comparisons,therefore,shouldbetreatedwithutmostcautionandtakenonlyasabroadindication.4.22022SURVEYRESULTS4.2.1PriceLevelsbyPriceFormationMechanismThefigurebelowshowsasnapshotofwholesalepricesfor2022bypriceformationmechanism15.FigureFi3g1ure29W-hWohleosleaslaelePrPirciecessinin22002222bbyyPPrriicceeFFoormrmataiotinonMMecehcahnaisnmism16.014.012.0$/MMBTU10.08.06.04.02.00.0OPEGOGBIMNETRCSRSPRBCThehighestpricesin2022werestill,just,intheOPEcategoryat$13.86perMMBTU,despitethehugeriseinspotpricesaroundtheworld.PricesintheGOGcategoryaveraged$12.12perMMBTU.However,thepricelevelintheGOGcategoryisheavilyinfluencedbytherelativelylowpricesinNorthAmericaandRussia,buttheriseinglobalspotprices,asthemarkettightenedenormouslyfollowingthestartoftheRussiawarwithUkraine,increasedtheGOGpricesrelativeto2020and2021.IfthelowerpricedmarketsofNorthAmericaandRussiawereexcludedthenthebalanceofGOGpriceswouldbe,onaverage,$24.68,almostdoubletheOPElevels.Intheregulatedcategories,itcanbeseenthatthepricesintheRCScategoryarehigherthanthoseinRSPand,inturn,RBC–whichwerethelowestat$1.71perMMBTUin2022.15Itshouldbenotedthatonanindividualcountrybasisnobreakdownhasbeenmadeofthepricelevelfordifferentpriceformationmechanismswithinthecountry,sothesamepricelevelisappliedtoallmechanisms.Thissimplifyingassumptionisnotconsideredtohaveanymaterialinfluenceontheconclusions.WHOLESALEGASPRICESURVEY2023EDITION43Section4WholesalePriceLevels4.2.2PriceLevelsbyRegionandCountryFigure32WholesalePricesin2022byRegionFigure30-WholesalePricesin2022byRegionMiddleEastAfricaFSULatinAmericaAsiaPaciﬁcAsiaEuropeNorthAmerica0.05.010.015.020.025.030.035.0$/MMBTUWholesalepricescanobviouslyvarysignificantlyfromyeartoyear.In2022,pricesinEuropewerebyfarthehighest,reflectingtherisingspotprices,at$32.48perMMBTU.AsiaPacifichadpricesaveraging$14.56andAsiahadaveragepricesat$10.24.OPEistheprimarypricingmechanisminbothregions,soweremuchlessimpactedbythehigherspotprices.PricesinNorthAmericain2022werebelowtheaverageforLatinAmerica,buthadrisenaboveotherregions.PricesintheFormerSovietUnion,in$terms,andtheMiddleEast,wereatbroadlysimilarlevels,withAfricapricesslightlyhigher.Theseconclusionsarefurtherreinforcedwhenwholesalepricesareviewedatthecountrylevel.Thefigurebelowincludesallmarketswithconsumptiongreaterthan8bcmin2022.WHOLESALEGASPRICESURVEY2023EDITION44Section4WholesalePriceLevelsFigure33WholesalePricesin2022byMarketFigure31-WholesalePricesin2022byMarketAustriaHungaryNetherlandsPolandItalyGermanyBelgiumUnitedKingdomFranceUkraineSouthKoreaChineseTaipeiTurkeySingaporeJapanSpainThailandBrazilAustraliaIndiaChinaMalaysiaPakistanKuwaitUSARomaniaMexicoIndonesiaBangladeshIraqArgentinaColombiaIsraelBahrainCanadaEgyptTrinidadBelarusNigeriaOmanPeruUnitedArabEmiratesAzerbaijanRussianFederationUzbekistanIranSaudiArabiaQatarKazakhstanTurkmenistanAlgeriaLibyaVenezuela0.05.010.015.020.025.030.035.040.045.050.0$/MMBTUThehighestwholesalepricesin2022,asin2021,werefoundinEuropeandnotthemainLNGimportingmarketsinAsiaPacific.The10highestpriceswereinEurope,especiallyinCentralandEastemEurope,plusUkrainebecauseofspotimports,andwereallabove$20perMMBtu.ThemainLNGimportingmarkets–Japan,SouthKorea,China,ChineseTaipeiandSingapore–arenowlowerdownthelist.PricesinSpainweresignificantlylowerthanotherEuropeancountries,reflectingthehighershareofOPEprices.PricesremainedrelativelylowerintheUSA,comparabletosomeAfricanandMiddleEastcountries.PricesinRussiahavecontinuedtobewellbelowothercountries,which,afewyearspreviously,theyhadbeenabove,asaconsequenceofthelargeroubledepreciations.Atthebottomofthechartaregenerallycountrieswherewholesalepricesweresubjecttosomeformofregulationandoftenbelowthecostofproductionandtransportation–Turkmenistan,AlgeriaandVenezuela.WHOLESALEGASPRICESURVEY2023EDITION45Section4WholesalePriceLevels4.3COMPARISONS2005TO20224.3.1ChangesinWholesalePricesbyPriceFormationMechanismsThefigurebelowcompareschangesinwholesalepricelevelsacrossthefifteensurveysbypriceformationmechanisms.Figure34WholesalePricesLevels2005to2022byPriceFormationMechanismIn2005thehighestpricesbypriceformationmechanismwereforGOGat$8.10perMMBTU,butthesedeclinedbetween2005and2009,beforelevellingoffataround$4.50,followedbysmallrisetothe$5.30rangein2013and2014.Thiswasfollowedbysharpdeclinesin2015and2016reaching$3.04.Therewasarisein2017to$3.78,withpricesrisinginallmarkets,andin2018to$4.36,largelydrivenbyrisingEuropeanhubprices.GOGpricesfellsharplyin2019asspotpricescollapsedtotheirlowestlevelssince2016,followedbyanother–Covid-inducedfall-min2020to$2.80–thelowestleveleverrecorded.IncontrastOPEpricesrosesignificantlyfrom$5.47perMMBTUin2005tojustunder$11.00in2013,asoilpricesincreased,remainingaroundthatlevelthrough2014,beforedecliningtoaround$8.00in2015and$6.00in2016,followingtheoilpricefall.OPEpricesalsorosebackin2017to$6.58,asoilpricesrecovered,andto$7.59in2018,beforedecliningslightlyin2019to$7.40,andfurtherto$6.12in2020.Therewerealsogeneralincreasesinpricesovertimeintheregulatedpricecategoriesaswell,throughto2014,althoughin2015and2016thistrendwasreversed,principallyduetosharpdollardeclinesintheFSUascurrenciesdepreciated.Theseagainwerereversedin2017assomepredominantlyregulatedcountriesincreasedprices.Regulatedpriceslevelledoffin2018and2019,withweakFSUpricesbeingoffsetbystrongerpriceselsewhere,butdeclinedslightlyagainin2020.In2021,pricesintheOPEandGOGcategoriesbothrose,reflectinghigheroilpricesandmuchhigherspotpricesinthemainGOGmarkets.In2022,pricesrosesharplyagainasspotpricessoared.Asnotedabove,theGOGprice,excludingNorthAmericaandRussia,waswellabovetheOPEprice.WHOLESALEGASPRICESURVEY2023EDITION46Section4WholesalePriceLevels4.3.2ChangesinWholesalePricesbyRegionThefigurebelowcompareschangesinwholesalepricelevelsacrossthethirteensurveysbyregion.FiguFrigeu3r5e33W-WhohleoslealseaPleriPceriLceevLeelsv2e0ls0520to0520t2o22b0y22RebgyioRnegion35.030.025.0$/MMBTU20.015.010.05.00.0200520072009201120122013201420152016201720182019202020212022NorthAmericaEuropeAsiaAsiaPaciﬁcLatinAmericaFSUAfricaMiddleEastWorldAttheworldlevel,onaverage,wholesalepriceshaverisenbetween2005and2013fromaround$4.47perMMBTUto$5.57.ThisrisewasacrossallregionsapartfromNorthAmerica,wherethedramaticincreaseinshalegassupplyhasledtoasharpdropinprices–withasmallreboundin2013.TheriseinpricesinEuropeandAsiaPacifichasbeenwelldocumentedandstudied,butpriceshavealsoriseninAsia,largelyduetoincreasesinpricesinChina,bothasmoregaswasimportedandregulateddomesticpricesincreased,andinIndiaforsimilarreasons.In2014,though,pricesinEuropebegantodeclineasthemarketweakenedand,intheFSUespecially,astheroubledepreciated.Thisacceleratedin2015,andpricesalsofellbackinNorthAmericaandAsiaPacificonthebackofweakdemand,abundantsupplyandtheimpactofthesharpfallinoilprices.However,someregionsdidnotseethesharp2014and2015fallinprices.ThesewereAsia,aspricingreformsandinertiaincreasedandkeptpricesupinChinaandIndia,theMiddleEast–asregulatedpriceswereincreasedinBahrain,OmanandIran,withotherpricesstayingstable–andAfrica–wherepricesincreasedinEgypt,NigeriaandAlgeria.In2016,pricesdeclinedfurtherinallregionsapartfromAfricaandtheMiddleEast,withaverageworldwholesalepricefallingto$3.35perMMBTU,thelowestlevelinallsurveys,upuntilthen.In2017,pricesgenerallyroseagaininallregionsastheglobalsupply–demandsituationtightenedandoilpricesrose.Pricealsoincreased,however,inthemoreregulatedregionsoftheFormerSovietUnion,AfricaandtheMiddleEast.WHOLESALEGASPRICESURVEY2023EDITION47Section4WholesalePriceLevelsIn2018,pricesincreasedinallregions,exceptfortheFormerSovietUnion,whereRussianpricesfellin$terms.Theaverageworldwholesalepricein2018was$4.38perMMBTU–thehighestaveragepricesince2014.Theseriseswerereversedin2019,theaveragepricefallingto$3.88perMMBTU,asglobalsupplyracedahead.Pricesacrosstheworlddeclinedagainin2020,withtheaveragepricereachingitslowesteverlevelat$3.24.Since2015,pricesinAsia,AsiaPacificandEuropebroadlytrackedeachother,butthislinkwasbrokenin2019asspotpricescollapsedwhichimpactedtheEuropeanmarketmuchmorethanAsiaandAsiaPacificwherepricesbarelychangedfrom2018levels.Thesedifferenceswidenedfurtherin2020asspotpricescollapsedagain.EuropeanpricesarenowmuchclosertotheWorldaveragethantheyhaveeverbeen,breakingdecisivelyfromAsiaandAsiaPacificprices.2021sawaverysharpincreaseinaverageEuropeanpricestosome$13.38perMMBTUfrom$3.75in2020.ThistookEuropeanpricesaboveAsiaPacificpricesforthefirsttimesince2013.Averageworldwholesalepricesroseto$5.54perMMBTUfrom$3.24in2020,justbelowthehighesteverglobalaverageof$5.58in2013.PricesinNorthAmericastillremainedrelativelylowbutdoubledin2021,reachingtheirhighestlevelsince2014.2022sawpricesrisesharplyagainand,withEuropepricesover$30perMMBTU,thisdraggeduptheaverageWorldpriceto$9.44perMMBTU–itshighestpriceever.ThehighestpriceseverwerealsorecordedinallotherregionsapartfromNorthAmericaandtheFormerSovietUnion.4.4ANALYSINGTHEPOST-COVIDRISEINGASPRICESInlookingatwholesalepricelevels,thesurveyonlyreallyconsiderstheannualaverageprices.2021and2022haveseenunprecedentedincreasesinspotpricesgloballyandalsoinpricevolatility,fromthedepthsof2020asCovid-19crippledtheworldeconomy.Priceshaveeasedbacksomewhatin2023,buttheyremainabovepre-crisislevelsandmarketconditionskeepthemsusceptibletofurthervolatility.Inordertounderstand,inmoredetail,whathappenedtopricessinceCovid-19,itisworthconsideringtheprogressioninmonthlyprices.Themonthly,ratherthandaily,pricesbetterreflecttheunderlyingsupply–demandbalanceintheworld,astheyarethemosttradedcontractsinthemarket.Beforeconsidering2021andbeyond,abrieflookbackto2019willhelpsetthescene.In2019,pricesinAsiaandEuropewereonadownwardtrendwithplentifulnewLNGsupplycomingonthemarket,againstthebackgroundofonlyslowlyrisingdemand.Asaresult,pricesdippedbrieflybelow$4perMMBTUinEurope.AsCovid-19hitin2020,globaldemandfell,withsupplycontinuingtoriseinthefirsthalfoftheyear,andpricescollapsedfurther–TTFreachedalowof$1.55inJune2020,JKMalowof$2.06inJuly2020andHenryHubalowof$1.50inthesamemonth.TheresultwasthatalotofLNGcargoes,especiallyfromtheUS,wereshut-induringthesummerof2020.WiththeimpactofCovid-19recedinglatein2020,thescenewassetfor2021anda“perfectstorm”hitthemarkets.The2020/21winterwasuniformlycoldacrossthenorthernhemisphere,withEurope,RussiaandAsiabeinghit.GasdemandrosesharplyandtheJKMpriceshotupinFebruary2021.LNGwasdivertedtoAsia,awayfromEurope,andpricesinEuroperemainedsubduedbecauseofhighlevelsofgasinstorageinEurope.GasproductioninRussiawasatrecordhighlevelsthrough2021butmuchofthatwasneededtomeetdomesticdemandandalsorefilldepletedRussianstorage.WHOLESALEGASPRICESURVEY2023EDITION48Section4WholesalePriceLevelsFigure36SpotPrices2019to202316$/MMBTUFigure34-SpotPrices2019to2023(19)80.0070.0060.0050.0040.0030.0020.0010.00-Jan-19Feb-19Mar-19Apr-19May-19Jun-19Jul-19Aug-19Sep-19Oct-19Nov-19Dec-19Jan-20Feb-20Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21Apr-21May-21Jun-21Jul-21Aug-21Sep-21Oct-21Nov-21Dec-21Jan-22Feb-22Mar-22Apr-22May-22Jun-22Jul-22Aug-22Sep-22Oct-22Nov-22Dec-22Jan-23Feb-23Mar-23Apr-23May-23Jun-23Jul-23JKMHHTTFAtthestartofsummer2021,demandgrowthremainedstrong,especiallyinChina,astheworldeconomyrecoveredfromCovid-19,andthelackofrainfallinLatinAmerica,ledtoseverelyreducedhydropowerinBrazil,withLNGimportsrisingsharplytooffsettheshortage.EuropeandAsiawerealsotryingtorefilltheirstorage,aswasRussia.AtthesametimeLNGexportcapacitywasdecliningratherthanincreasing,withfeedgasissuesatplantsinTrinidadandNigeria,extendedmaintenanceatnumerousplants,catchingupfrommissedmaintenanceperiodsintheCovid-hit2020,plustechnicalissuesatanumberofotherplantsandNorway’sexportplantbeingdownbecauseofafireinlate2020.Allthisledtoacontinuousrun-upinpricesthroughoutthesummer.RussianpipelineflowstoEuroperemainedatrelativelystronglevelsthroughAugust,butthenRussiareducedspotgasvolumesonoffer,whileatthesametime,theEuropeanbuyersbeganreducingtheircontractedvolumesnominations17andbuyingmoreonthespotmarket.Withstrongdemand,pricesrosesharplyagaininthefinalquarterof2021.EvenHenryHubpricesbeganrising,drivenbyhigherdemand,bothdomesticandforLNGexports,plustheneedtorebuildstoragewithlessabundantsupplyinafurthertighteningmarket.Entering2022,thispatternofstrongdemandandtightsupplywasrepeated,soevenbeforetheRussia–Ukrainewar,priceshadreachedarecordofwellover$30perMMBTU.FollowingthestartoftheRussia–Ukrainewar,pricesjumpedagainonthefearthatpipelineflowsfromRussiacouldbedramaticallyreduced.WithRussiaflowscontinuingatevenhigherlevels,asEuropeanbuyerssteppeduptheircontractpurchasenominations,priceseasedbackslightlyintheendofthefirstquarterof2022.EuropebegantoimportsubstantiallymorespotLNG,withcargoesdivertingfromAsiaandLatinAmericamarketsonthe16DatasourcesareS&PGlobalandArgus.17Buyersnominateonadailybasistheamountofgastheywanttoreceiveunderthelong-termcontractwithinarangespecifiedinthecontract.WHOLESALEGASPRICESURVEY2023EDITION49Section4WholesalePriceLevelsbetterspotpriceoffering.IncreasingLNGsupplyhelpedaswell,asthesupplyconstrainissuesfrom2021weregraduallyresolvingandnewplantsintheUScameonlinetoprovideadditionalvolumes.ThiswasalsohelpedbysharpdeclinesinChina’sLNGdemand,reflectingcontinuingCOVIDlockdowns,andweakerdemandinBrazilashydropowerpickedup.InAprilandMayof2022,pipeflowsfromRussiatoEuropebegantofalloffagain,withflowstoRussia’sGazprom’sEuropeansubsidiariesstopping,alongwithcontractscancellationsfollowingarefusalofsomebuyersrefusedtocomplywiththenewlyimposedroublescurrencypaymentmechanismbyGazprom.InJune,flowsonNordstream1pipeline(themainsupplyroutefromRussiatotheEuropeanconsumers)fellsharply,ostensiblybecauseofreducedcompressoravailability,withonecompressorbeinginCanadaformaintenanceandseveralothersofflineawaitingmaintenance.Thispushedpricesevenhigher,reachingover$50perMMBTUtowardstheendofJuneforbothTTFandJKM.Pricesroseevenfurther,peakinginSeptember(onthemonthlyindex)aroundthetimeoftheexplosionsdamagingtheNordstreampipelines.Fromthenonpriceseasedandhavecontinuedtodosoin2023,asthecombinationofmildweather,sharpfallsinEuropeangasdemand,Chinagasdemandremainingweak,highlevelsofEuropeangasstorage,andrisingLNGsupplyreducedthepressureonprices.Pricesappeartobestabilisingat$10perMMBTUoraboveasweheadtowinter,withthemarketremainingtightbutthehighlevelsofgasinEuropeanstorageisprovidingavaluablebackstop.However,fullstorageisonlyonevariableofmany,includingweatherandglobalandregionaldemandpatternsassupplyremainstight,whichwilldeterminethemarketbehaviourinthesecondhalfof2023.TheWholesalePriceHeatMapbelowillustrateswhichwerethehighandlow-pricedmarketsin2022.Thehighest-pricedmarketsindeepredarewherethewholesalepricewasabove$20perMMBTUin2022,inorangewherethepricewasbetween$15and$20perMMBTU,inyellowbetween$10and$15perMMBTU,lightgreenbetween$5and$10perMMBTUandindeepgreenbelow$5perMMBTU.WHOLESALEGASPRICESURVEY2023EDITION50Section4WholesalePriceLevelsFigure37WholesalePriceHeatMap2022GREENLANDICELANDFINLANDSWEDENNORWAYRUSSIACANADAESTONIAUNITEDKINGDOMDENMARKLATVIALITHUANIAIRELANDPOLANDBELARUSNETHERLANDSGERMANYBELGIUMCZECHREPUKRAINESWITZERLANDFRANCESLOVAKIAKAZAKHSTANPORTUGALAUSTRIAHUNGARYMOLDOVAMONGOLIASLOVENIAROMANIAMONACOCROATIASERBIAGEORGIAUZBEKISTANKYRGYZSTANMONTENEGROBULGARIAUNITEDSTATESSPAINITALYALBANIAARMENIAAZERBAIJANNORTHKOREASOUTHKOREAMALTAGREECETURKEYTURKMENISTANTAJIKISTANJAPANTUNISIABOSNIA&CYPRUSSYRIAAFGHANISTANCHINAALGERIACHINESETAIPEIHERZOGOVENIALEBANONIRAQIRANKONGMOROCCOPALESTINIANTERRITORYJORDANPAKISTANPHILIPPINESKUWAITCUBAISRAELNEPALBHUTANJAMAICABAHRAINLIBYAEGYPTHAITIWESTERNSAHARAUAEBANGLADESHDOMINICAREPUBLICQATARINDIAMEXICOMAURITANIASAUDIARABIAMYANMARLAOSHONGBELIZESENEGALGUATEMALAPUERTORICOTHEGAMBIAMALINIGERCHADSUDANOMANTHAILANDVIETNAMHONDURASTRINIDADANDTOBAGONIGERIAERITREAYEMENNICARAGUABURKINACENTRALSOUTHCAMBODIAFASOAFRICANSUDANDJIBOUTIELSALVADORVENEZUALAGUYANAGUINEA-BISSAUBRUNEICOSTARICACOLOMBIAPANAMASURINAMEGUINEAETHIOPIAFRENCHGUIANASIERRALEONECAMEROONREPSOMALIASRILANKAMALAYSIALIBERIACONGOUGANDAPAPUANEWGUINEACOTED’IVOIREKENYAGHANAECUADORTOGOEQUATORIALRWANDAGUINEADRCONGOTANZANIABURUNDIBENININDONESIAPERUBRAZILGABONTIMOR-LESTEANGOLAMALAWIZAMBIAMOZAMBIQUEBOLIVIAZIMBABWENAMIBIABOTSWANAMADAGASCARPARAGUAYAUSTRALIAESWATINILESOTHOMorethan$20perMMBTUCHILEURUGUAYSOUTHAFRICA$15to$20perMMBTUARGENTINA$10to$15perMMBTU$5to$10perMMBTUNEWZEALANDLessthan$5perMMBTUFigure38ChangeinDemandMap2022v2021GREENLANDICELANDFINLANDSWEDENNORWAYRUSSIACANADAESTONIAUNITEDKINGDOMDENMARKLATVIALITHUANIAIRELANDPOLANDBELARUSNETHERLANDSGERMANYBELGIUMCZECHREPUKRAINESWITZERLANDFRANCESLOVAKIAKAZAKHSTANPORTUGALAUSTRIAHUNGARYMOLDOVAMONGOLIASLOVENIAROMANIAMONACOCROATIASERBIAGEORGIAUZBEKISTANKYRGYZSTANMONTENEGROBULGARIAUNITEDSTATESSPAINITALYALBANIAARMENIAAZERBAIJANNORTHKOREASOUTHKOREAMALTAGREECETURKEYTURKMENISTANTAJIKISTANJAPANTUNISIABOSNIA&CYPRUSSYRIAAFGHANISTANCHINAALGERIACHINESETAIPEIHERZOGOVENIALEBANONIRAQIRANKONGMOROCCOPALESTINIANTERRITORYJORDANPAKISTANPHILIPPINESKUWAITCUBAISRAELNEPALBHUTANJAMAICABAHRAINLIBYAEGYPTHAITIWESTERNSAHARAUAEBANGLADESHDOMINICAREPUBLICQATARINDIAMEXICOMAURITANIASAUDIARABIAMYANMARLAOSHONGBELIZESENEGALGUATEMALAPUERTORICOTHEGAMBIAMALINIGERCHADSUDANOMANTHAILANDVIETNAMHONDURASTRINIDADANDTOBAGONIGERIAERITREAYEMENNICARAGUABURKINACENTRALSOUTHCAMBODIAFASOAFRICANSUDANDJIBOUTIELSALVADORVENEZUALAGUYANAGUINEA-BISSAUBRUNEICOSTARICACOLOMBIAPANAMASURINAMEGUINEAETHIOPIAFRENCHGUIANASIERRALEONECAMEROONREPSOMALIASRILANKAMALAYSIALIBERIACONGOUGANDAPAPUANEWGUINEACOTED’IVOIREKENYAGHANAECUADORTOGOEQUATORIALRWANDAGUINEADRCONGOTANZANIABURUNDIBENININDONESIAPERUBRAZILGABONTIMOR-LESTEANGOLAMALAWIZAMBIAMOZAMBIQUEBOLIVIAZIMBABWENAMIBIABOTSWANAMADAGASCARPARAGUAYAUSTRALIAESWATINIMorethan10%declineCHILEURUGUAYLESOTHO5%to10%declineSOUTHAFRICA0%to5%declineARGENTINA0%to10%increaseNEWZEALANDMorethan10%increaseWHOLESALEGASPRICESURVEY2023EDITION51Section4WholesalePriceLevels2022sawsignificantfallsingasdemandinsomemarkets,notablyinEurope,wheretheveryhighpricescurtaileddemandinindustrialsectorsespeciallyandledtobehaviouralchangesinhouseholds.Outsidethesemarkets,pricesdon’tappeartohaveimpactedgasdemandthatmuch–theweaknessinChinesegasdemandwasmoreareflectionofthecontinuingimpactoftheCovidlockdowns.Asin2021,Europewasdominatedbythehigh-pricedmarketsin2022,withSouthKoreaandChineseTaipeialsoaveragingover$20perMMBTU,onthebackofincreasespotLNGimports.CountrieslikeJapan,TurkeyandSpain,whicharealsoheavilydependentimports,hadpriceslessthan$20perMMBTU,withamixtureofoil-indexedandspotprices.MarketssuchasBrazil,ChinaandIndia,importsignificantvolumesbutmixingwithdomesticproductionreducestheaveragewholesaleprice.Marketswithpricesbelow$10perMMBTUarelargelythosewithalmostalltheirconsumptionmetbydomesticproduction,includingthetradedmarketoftheUSA.Finally,marketswithpricesbelow$5perMMBTUaredominatedbyregulatedmarkets,oftensubsidised,andareconcentratedintheFormerSovietUnion,MiddleEastandAfrica.FollowingtherecoveryingasdemandfromCovid-19in2021,2022sawsomesharpfallsingasdemandinmanymarkets.Partofthiswasaresponsetowarmerweatherbutthesharpriseinpriceshadsomeeffect.TheChangeinDemandMapaboveshowsthechangesindemandbymarketin2022.Thedeepredmarketsarethosewherethedeclineindemandwasgreaterthan10%,orangewherethedeclineindemandwasbetween5%and10%,inyellowwherethedeclineindemandwasbetween0%and5%,inlightgreenwheretherewasanincreaseindemandwasbetween0%and10%andindeepgreenwheretherewasanincreaseindemandofmorethan10%.AcasualcomparisonoftheWholesalePriceHeatMapandtheChangeinDemandMapsuggeststhattheveryhigh-pricedmarkets(redandorangeintheheatmap)weregenerallyassociatedwithsignificantdeclinesindemand(redandorangeinthechangeindemandmap.Thefigurebelowisamoreformalanalysis,plottingthepricelevelagainstthechangeindemandbetween2021and2022.Thereisawidespreadforessentiallyasimplechartbut,withinawiderange,itconfirmsthathigherpricesaregenerallyassociatedwithsignificantfallsingasdemandyear-on-year.Outofthe106observations,52weremarketswithapricein2022ofover$10perMMBTU,andoutofthoseonly8didnotshowadeclineindemand.Figure39FigureW37h-oWlehsoalelseaPlerPicreiceLeLevveellaannddCChhaanngegieniDneDmeamnda2n0d222(2012)218Price$/MMBTU706050-60%-40%-20%0%20%40%40302010--80%%Changeindemand18Thechartofthechangeinpriceagainstthechangeindemandfor2022against2021givesexactlythesamepicture.WHOLESALEGASPRICESURVEY2023EDITION52Section1Section5GlobalGasPriceConvergenceWHOLESALEGASPRICESURVEY2023EDITION53Section5GlobalGasPriceConvergence5.1INTRODUCTION19Intheperiodsincethesurveysbeganin2005,itisgenerallyrecognisedthattheglobalnaturalgasmarketshavebecomemoreintegratedthroughincreasedLNGtrade,increasedmarketrelatedpricingandgastradinghubdevelopment.Itmightbeexpected,therefore,thatglobalgaspriceswouldconverge,asmarketsbecamemoreintegrated.However,theconventionalwisdomisthatofglobalgaspricedivergence,basedonafewregionalgaspricemarkerssuchasHenryHub,NBPandJapaneseimportprices,especiallyuntil2015.AcasuallookatFigure35onwholesalepricelevelsbyregionwouldappeartoconfirmtheconventionalwisdom,asthedifferentialsbetweenAsia,AsiaPacificandEuropeprices,ontheonehand,widenedcomparedtomostotherregionsthrough2015.Thissectioncontainsananalysisofwhethergaspriceshavebeenconvergingonaglobalbasisovertheyearsofthesurvey,usingthewholesalepricedatafromthefifteensurveys.5.2MEASURINGPRICECONVERGENCEThewholesalepricesurveyshaveresultedinauniquedatabasewithdataongaspriceformationmechanisms,gasvolumes,andannualaveragegaspricesofwellover100markets.Thedatabaseenablesanalysisofdifferentsubsetsofcountries,categorizedbypropertiessuchaspriceformationmechanism,region,andsharesofimports.Thishasbeenusedtoshedmorelightontheapparentcontradictionbetweentheexpectationofpriceconvergencebasedoneconomictheory20andmarketdevelopmentsandtheconventionalmarketviewofgaspricedivergence.Thelargenumberofcountriesavailableinthedata-base,aswellastheuseofthecoefficientofvariationasameasureforpriceconvergencecanprovidenewinsights.Thecoefficientofvariationofpricesofadatasetinacertainyearisdeterminedbythestandarddeviationdividedbythemeanvalueoftheseprices.Theamountofabsolutepricevariation(standarddeviation)isthusmeasuredrelativetotheaveragepriceinacertainyear.Alowcoefficientofvariationindicatesahigherlevelofpriceconvergenceandvice-versa.Thismeasureisparticularlysuitablefordatasetswithalimitednumberofdatapoints(inourdatabase15years),foralargenumberofpricelines(inourdatabasemorethan100markets),andtheabilitytosubdivideintosubsetsofcountrieswithdifferentmeangasprices.5.3PRICECONVERGENCEUSINGTHESURVEYDATAAsabackgroundtothemethodologyused,thegraphsofthe(unweighted)averagepriceandthestandarddeviationareincludedbelow.Thepatternofchangeovertheyearsoftheaveragepriceandstandarddeviationaresimilar.Thelevelofstandarddeviationisfirstlyrelatedtopricelevel.Whenacorrectionismadeforthepricelevel(standarddeviationdividedbyaverageprice),theresultingcoefficientofvariationshowstherelativevarianceofprices.Thiscanbeusedasanindicationofthelevelpriceconvergence.Intheperiod2005to2020thecoefficientofvariationofgaspricesofthisfulldatasetdeclinedby15percentagepoints,withthesharpestdropbetween2012and2017,indicatingglobalgaspriceconvergence.Therewasasmallrisein2018,suggestingaslightdivergence,marginallyreversedin2019and2020.Thistrendofadecreasingcoefficientofvariationisconsistentwithourexpectationsbasedontheeconomic19TheanalysisofglobalgaspriceconvergencewasundertakenbyFlorisMerisonofGasterra.20TheeconomictheoryoftheLawofOnePricestatesthat,inaperfectmarket,potentialarbitrageopportunitiesbetweencountriesareimmediatelyexploitedbymarketparticipants,leadingtoconvergencetoonesingleprice.WithgrowingLNGtradeandmoremarketsinvolved,itmightbeexpectedthatglobalgaspricesshouldhaveconverged,duetoincreasingarbitragepossibilitiesandfurthermarketintegration.WHOLESALEGASPRICESURVEY2023EDITION54Section5GlobalGasPriceConvergencetheoryoftheLawofOnePriceandcanbeseenasanindicatorthattheglobalgasmarketswereconverging.However,in2021thecoefficientofvariationrosebacktojustbelow2005levels,andin2022thecoefficientsoaredonthebackofsharplyrisingpricesinthemainimportingregions,toalmost100%.FiguFreig4u0re38-AAvveeraraggeePPrriciceeaannddSSttaannddaarrddDDeevviiaattiioonnoofftthheeFFuullllDDaattaasseett16.014.012.0$/MMBTU10.08.06.04.02.00.0200520072009201020122013201420152016201720182019202020212022standarddeviation($/MMBTU)averageprice($/MMBTU)Figure39-GlobalGasPriceVariationTrendFigure41GlobalGasPriceVariationTrendCoeﬃcientofvariation120%100%80%60%40%20%0%200520072009201020122013201420152016201720182019202020212022FullIGUDatasetWHOLESALEGASPRICESURVEY2023EDITION55Section5GlobalGasPriceConvergenceInordertobeabletotradetoexploitarbitrageopportunities(leadingtogaspriceconvergence),countriesshouldbeconnectedtotheglobalgasmarket.Connectednesstotheglobalgasmarketcouldberealizedthroughphysicalgasimportsorthroughmarketrelatedpricing.Wethereforelookedatasubsetofcountrieswithaminimumlevelofgasimports(10%)andasubsetofcountrieswithmarketrelatedprices.Theresultisasexpected,withthecoefficientofvariationbeingmuchlowerinagroupofcountriesconnectedtotheglobalgasmarketthroughphysicalimportsand/ormarketrelatedprices.Importingcountriesandmarketrelatedpricingcountrieshadverysimilarlevelsofconvergence,withalargeoverlapintermsofdata.Aswouldbeexpected,thegroupofcountrieswithbothgasimportsandmarketrelatedpriceshasthelowestcoefficientofvariation.Figure42PriceConvergenceforGasImportingMarketsFigure41-PriceConvergenceforMarketRelatedPricesFigure43PriceConvergenceforMarketRelatedPrices120%100%Coeﬃcientofvariation80%60%40%20%0%200520072009201020122013201420152016201720182019202020212022FullIGUDatasetCountrieswithmarketrelatedgaspricesWHOLESALEGASPRICESURVEY2023EDITION56Section5GlobalGasPriceConvergenceWehavedefinedcountrieswithmarketrelatedpricesascountrieswherethemajorityofgasispricedthroughmarketrelatedpriceformationmechanisms–OPE,GOG,BIMandNET–withOPEandGOGhavingbyfarthelargershare.Non-marketrelatedpricesmainlyincludetheregulatedpriceformationcategories:RCS,RSPandRBC.Inthefigurebelow,therelativestabilityofthecountrieswithnon-marketrelatedprices,contrastsFwigituhreth4e2m-ParrikceetC-roenlavteerdgnpcreicDeysn,wamithictfhoerNcooenf-fMicaiernktetinatnhdeMlaatrtkeertnRoewataepdpPrroiacechsingtheformer.Figure44PriceConvergenceDynamicforNon-MarketandMarketRelatedPricesCoeﬃcientofvariation100%90%80%70%60%50%40%30%20%10%0%200520072009201020122013201420152016201720182019202020212022CountrieswithnonmarketrelatedgaspricesCountrieswithmarketrelatedgaspricesWhenwelookwithinthegroupofcountrieswithmarketrelatedpricing,weseethatasubsetofcountrieswithOPEasthemainpriceformationmechanismshowsmorepriceconvergencei.e.alowercoefficientofvariation.Thisisnotsurprising,sincethesepricesarelargelyallindexedtocrudeoil,gasoiland/orfueloilprices.TherelativestabilityofcoefficientofvariationofthesubsetofcountrieswithOPEisinterestingtonote,atleastupuntil2022.Thisrisein2022islikelytoreflectthatthesemarketsalsowereimpactedbytheveryhighFiagnudreri4s3in-gPsrpicoetCpornicveesrgfoerncpearfotroOftPhEePirrigcaesssupply.Figure45PriceConvergenceforOPEPrices80%70%Coeﬃcientofvariation60%50%40%30%20%10%0%200520072009201020122013201420152016201720182019202020212022CountrieswithmarketrelatedgaspricesCountrieswithOPEingaspricesWHOLESALEGASPRICESURVEY2023EDITION57Section5GlobalGasPriceConvergenceFigure44-NumberofMarketswhereOPEorGOGistheMajorityMechanism#ofcountriesFigure46NumberofMarketswhereOPEorGOGistheMajorityMechanism4035302520151050200520072009201020122013201420152016201720182019202020212022CountrieswithOPEinGasPricesCountrieswithGOGinGasPricesAscanbeseeninabovefigurethenumberofmarketswithamajorityofgasconsumedpricedagainstGOGhasincreasedconsiderably.Inthefirstyears,thenumberwastoosmallanddynamictocalculateameaningfulcoefficientofvariation,butfrom2013thepopulationbecamelargeenoughtoresultinamorestablecoefficientofvariation,atalevellowerthanthetotalgroupofcountrieswithmarketrelatedgaspricesandapproachingthelevelofpriceconvergenceofthegroupofcountrieswithOPEuntil2020.In2021and2022,thegapinpriceconvergencebetweenthegroupsofcountrieswithGOGandOPEiswideningagain,withthespikeinGOGpricesinEuropeasthemajordriver.Figure45-PriceConvergenceforMarketRelatedandGOGPricesFigure47PriceConvergenceforMarketRelatedandGOGPricesCoeﬃcientofvariation80%70%60%50%40%30%20%10%0%200520072009201020122013201420152016201720182019202020212022CountrieswithmarketrelatedgaspricesCountrieswithGOGingaspricesWHOLESALEGASPRICESURVEY2023EDITION58Section5GlobalGasPriceConvergenceFigure46-PriceConvergenceforOPEandGOGPricesFigure48PriceConvergenceforOPEandGOGPrices70%60%Coeﬃcientofvariation50%40%30%20%10%0%200520072009201020122013201420152016201720182019202020212022CountrieswithOPEingaspricesCountrieswithGOGingaspricesWhenwelookatthedifferentIGUregions,Europeistheonlyregionwithsufficientcountriestomakemeaningfulconvergencecalculations.HerewecanconcludethatthereismorepriceconvergenceamongstgasimportingcountrieswithmarketrelatedpriceswithinEuropethanonagloballevel,sincethedeclineinthecoefficientofvariationhadbeengreaterthaninallimportingcountrieswithmarket-basedgasprices,andtherisein2022lessinEuropethanfortheglobaltotal.This,again,isnotsurprisingsinceintraregionaltradeofnaturalgasisusuallyeasierandlesscostlythaninterregionaltrade.Figure47-PriceConvergenceforEuropeFigure49PriceConvergenceforEuropeCoeﬃcientofvariation80%70%60%50%40%30%20%10%0%200520072009201020122013201420152016201720182019202020212022CountrieswithmarketrelatedgaspricesCountrieswithmarketrelatedgaspricesinEuropeWHOLESALEGASPRICESURVEY2023EDITION59Section5GlobalGasPriceConvergenceIncontradictiontothegeneraltrendofpricedivergencein2021ascomparedwithearlieryears,priceswithinthegroupofLNGimportingcountries2021actuallydidnotdiverge.However,thischangedin2022,withincreasingdivergenceasspotpricesjumped.Theriseinpricesin2022hasoverwhelmedthepreviousstabilityintheglobalLNGmarket.Thelargeandstablegroupofcountrieswithpipelineimportsfollowedthegeneraltrendofpricedivergencein2021aFnidgu2r0e2428.T-hPeripciepeCloinnevaenrgdeLnNcGefiomrpPoirpteinlignceoaunndtrLieNsGnoImwplooortkinvegrCyosuimnitlraireisntermsofpricedivergence.Figure50PriceConvergenceforPipelineandLNGImportingCountries70%60%Coeﬃcientofvariation50%40%30%20%10%0%200520072009201020122013201420152016201720182019202020212022CountrieswithpipelineimportsCountrieswithLNGimports5.4CONCLUSIONSThisanalysisshowsthatglobalgaspriceshadbeenconvergingcontinuouslysince2005,indicatingfurtherglobalisationofthegasmarkets,upuntil2017.Theincreasingconvergencethenstalledandin2021and2022,notsurprisingly,pricesdivergedagain,morethaneliminatingtheconvergencesince2005.Thetrendofpriceconvergence,through2015,isagainsttheconventionalmarketwisdomofgaspricedivergenceintheyearsupto2015,butinlinewithdevelopmentssuchasthegrowthofLNGtradeandincreasedmarket-relatedgaspricing.Upuntil2015,itisalsoconcludedthatthereismoregaspriceconvergenceamongstcountries(1)withmarketrelatedpricing,(2)whichareconnectedwiththeglobalgasmarketthroughgasimports,(3)withoil-indexedgasprices,andsince2014withgas-indexedprices,and(4)withinEurope.Countrieswithnon-marketrelatedpriceshaveshownrelativestabilityintermsofthecoefficientofvariation.Since2017,however,therewasrelativestabilityinthecoefficientofvariation,otherthanfor2018,suggestingthatthetrendofmorepriceconvergencehadstalledorcometoanend.2021,however,undidalltheconvergencesince2005asspotpricesrosesharply,andevenfurtherin2022.Theextraordinarypricedevelopmentsintheglobalgasmarketsin2021and,especially,in2022,clearlyhavehadwidelydivergingimpactsinindividualcountriesandsubsetsofcountries.Importingcountriesreliantonspotimportsandcontractslinkedtohubpricessawtheirpricesdivergesharplyfromcountrieswithoil-linkedpricesand,evenmoreso,thosewithregulatedprices,withtheglobalcoefficientofvariationreachingalmost100%from50%in2017.WHOLESALEGASPRICESURVEY2023EDITION60Section1AppendixARegionalLevelResultsWHOLESALEGASPRICESURVEY2023EDITION61AppendixARegionalLevelResultsA.1NORTHAMERICAA.1.1NorthAmerica2022SurveyResultsNorthAmericaconsumptionin2022wassome28%oftotalworldconsumption–around1,130bcm.FiguFriegu51re49-NNoorrtthhAAmmeerriiccaaPPrriicceeFFoorrmmaattiioonn22002222NB0%GOG100%GOGclearlydominatestheNorthAmericanmarketwithfullyliquidtradingmarketsintheUSAandCanada.ThewholesalepriceinMexicousedtobereferencedtopricesintheUSA,buttherearenowreferencepricesbasedontradesinMexico.ThesmallamountofNPisinMexicowherePemexusesthegasintherefineryprocessandforenhancedoilrecovery.WHOLESALEGASPRICESURVEY2023EDITION62AppendixARegionalLevelResultsA.1.2NorthAmericaComparison2005to2022Priceformationmechanismshavenotchangedatall,ineffect,inNorthAmericaovertheninesurveys.Apartfromthesmallamount–under1%-ofNPwhich,asnotedearlier,isgasusedbyPemexinrefineryprocessesandenhancedoilrecovery,NorthAmericawasallGOGin2005andhasremainedsoeversince.Infact,ifthesurveyshadgonebackevenfurther,itislikelythattheUSAatleastwouldhavebeenGOGsincetheearly1990s.Figure52FigurNeo5r0th-NAomrethricAamPerriciceaFPorrimceaFtioornm2a0t0io5nto20200522to2022100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNPWHOLESALEGASPRICESURVEY2023EDITION63AppendixARegionalLevelResultsA.2EUROPEA.2.1Europe2022SurveyResultsEuropeanconsumptionin2022wassome12%oftotalworldconsumption–around498bcm.FiguFrigeu5r3e51-EEuurrooppeePPrriicceeFFoorrmmaattiioonn22002222RSP0%OPE18%GOG82%GOGremainsthelargestshareinEurope,standingat82%,totallingaround409bcm.Some68bcmisdomesticproduction,mainlyNetherlandsandUK,witharound243bcmbeingpipelineimports,predominantlyallthenorthwestEuropeancountriesplusItaly,andinpartTurkey.intheMediterraneanarea,butalsothecentralEuropeancountriesofPoland,CzechRepublic,Slovakia,AustriaandHungary.LNGimportsnowaccountsfor98bcm,ofwhicharoundone-thirdisdeemedasbeinginthetradedcategoryinthetradingmarketsoftheUK,France,Italy,BelgiumandNetherlands,withtheremainingquantitiesbeingspotcargoesintothosemarketandthemoretraditionalLNGimportingcountries.OPEisnowat18%,totallingaround87bcm,andispredominantlypipelineimports(55bcm)nowinto60%oftheEuropeancountries,followedbyLNGimports(31bcm)intoSpain,France,Italy,Turkey,Portugal,PolandandGreece,withdomesticproduction(1bcm)inahandfulofcountries.RSPalsoaccountsforsome2bcmandisdomesticproductioninHungaryandCroatia.WHOLESALEGASPRICESURVEY2023EDITION64AppendixARegionalLevelResultsA.2.2EuropeComparison2005to2022Europeisoneoftheregionswherethemostsignificantchangesinpriceformationmechanismshavetakenplace.TherehasbeenabroadlycontinuousmovefromOPEtoGOGsince2005,withGOG’sshareincreasingfrom15%in2005–whenOPEwas78%–to82%in2022,withOPEatsome18%.TheRCScategory–domesticproductioninRomania–hassteadilydeclinedtozero,whileRSPdeclinedin2017asitdisappearedinthePolishmarket.Thechangeshavereflectedanumberoffactorsovertheyears;initiallyadeclineinthevolumeofgasimportedunderthetraditionaloilindexedcontracts,beingreplacedbyimportsofspotgasandincreasingvolumestradedathubs,followedbytheendingofcontractsortherenegotiationofthetermstoincludeaproportionofhub/spotpriceindexationinthepricingterms,orevenamoveto100%hubpriceindexation,andinsomecases,areductioninthetake-or-paylevels.Therenegotiationssawtheintroductionofhybridcontracts21,althoughitisthoughtinthelastfewyearsevensomeofthesehybridcontractsarenowpurelyhub/spotindexation.ThetrendtowardsGOGandawayfromOPE,wasreinforcedbythecontinueddeclineindomesticproductionintheUKintheoldlegacycontracts,whichwereintheOPEcategory,tobereplacedbypipelineandLNGimports,allatGOG.In2019,therewasafurtherriseinGOGasLNGimportssurgedwithrisingspotLNGcargoesinmanytraditionalLNGimportingmarkets.In2020therewasasmallfallbackinGOGLNGimportsasSpainswitchedmoretoOPELNG.In2021,OPErecoveredsomegroundasdemandrosesharplyinTurkey,ItalyandSpainmetbyrisingOPEpipelineimports.In2022,therewasasharpriseinGOGLNGimports,largelyspotLNGcargoes,togetherwithachangeinTurkey’spipelinecontractswithRussiatopartlyGOG.Figure54FigEuurreo5p2e-PEruicroepFeoPrmricaetiFoonrm20at0i5onto2020052t2o2022100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNP21Underthepricingformulas,oilindexationwaspartlymaintainedbutwithinapricecorridorsetbyhubprices.Suchcontractsaresometimescalledquasi-oilindexedbutcouldequallybereferredtoasquasi-hubindexed.ItissuggestedtotherespondentstothewholesalepricesurveythatsuchhybridcontractsaresplitbetweenGOGandOPE,withtheproportiondependentonhownarrowthepricecorridoris.Forexample,ifthepricecorridorisverynarrow,thecontractiseffectivelyonlynotionallylinkedtooilpricesandthereforewouldbeallocatedmoretowardsGOG.IncontrastifthebandisrelativelywidethenmorewouldbeallocatedtoOPE.WHOLESALEGASPRICESURVEY2023EDITION65AppendixARegionalLevelResultsThechangeinpriceformationmechanismsinEuropewasnotuniversalacrosstheregion.Thefiguresbelowsummarisethechangesinthekeysub-regions.NorthwestEurope22hasseenthemostdramaticchangeinpriceformationmechanisms,withacompletereversalintheratioofOPEtoGOGfrom63%OPEand37%GOGin2005to6%OPEand94%GOGin2022,asaresultofincreasedhubtradingandcontractrenegotiations,asnotedabove.Figure55FNigourrteh5w3e-sNtoEruthrwopesetPEruircoepFeoPrrmiceatFioornm2a0ti0o5nt2o00250t2o22022100%90%80%70%60%50%40%30%20%10%0%201020152016201720182019202020212005NPOPEGOGBIMNETRCSRSPRBCFigure56CFiegnutrrea5l4E-uCreonpteraPlrEiucreoFpoerPmricaetiFoonrm20at0i5onto2020052t2o2022100%90%80%70%60%50%40%30%20%10%0%200520102015201620172018201920202021NPOPEGOGBIMNETRCSRSPRBCCentralEurope23hasalso,morerecently,seensignificantchanges.OPEhasdeclinedfrom85%in2005to11%in2022,whileGOGhasincreasedfromalmostzeroin2005to87%in2022,principallyreflectingincreasedimportsofspotgas,oftenfromGermany,andcontractrenegotiations.However,in2017theGOGincrease–59%to73%-wasmostlydowntotheswitchfromRSPinPolandasaresultofregulatoryreform.22Belgium,Denmark,France,Germany,Ireland,Luxembourg,Netherlands,UK.23Austria,CzechRepublic,Hungary,Poland,Slovakia,Switzerland.WHOLESALEGASPRICESURVEY2023EDITION66AppendixARegionalLevelResultsTherehasbeenmuchlesschangeinotherareasofEuropesuchastheMediterranean24,whereOPEhasonlydeclinedfrom100%in2005toalowof47%in2020,andGOGrisingfromnothingto53%.ThisinitiallyreflectedspotLNGimportsinthesub-regionandsomespotpipelineimportsintoItaly,aswellaschangesinthepricingofdomesticproductioninItaly.However,in2014thiswasfurtherenhancedbytherenegotiationofthemainRussiancontractintoItaly,andin2017,thechangeintheAlgeriancontractintoItaly.In2019spotLNGimportsincreasedbutfellbackin2020asSpainincreasedtheshareofOPELNGimports.In2021,withrisingOPEinTurkey,ItalyandSpainpipelineimports,theOPEsharejumpedbackto54%andGOGdownto46%.In2022,theGOGsharejumpedbackto63%withtheriseinspotLNGcargoesandthechangeinpipelinegascontractsinTurkey.Figure57MediterraneanPriceFormation2005to2022Figure55-MediterraneanPriceFormation2005to2022100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNP24Greece,Italy,Portugal,Spain,Turkey.25Bosnia,Bulgaria,Croatia,FYROM,Romania,Serbia,SloveniaWHOLESALEGASPRICESURVEY2023EDITION67AppendixARegionalLevelResultsInSoutheastEurope25GOGbeganin2013asRomaniabeganliberalisingdomesticproductionpricing,movingawayfromRCS–aprocesswhichwascompletedin2018.ThereisalsoasmallamountofGOGinCroatiaandSlovenia.TheriseinOPEin2012reflectedaswitchfromBIMinBulgaria,whereuntil2010therewaspaymentinkindfortransit(BIM)whichthenbecameacashpaymentwiththegasbeingpurchasedunderthesameOPEtermsastheotherimportedgas.OPEfellbackagainin2013and2014asimportsdeclinedinRomania,beforestabilisingin2015.2017and2018sawmoredeclinesforOPE,asRomanianimportsfell.TheOPEshareroseagainslightlyin2019asconsumptionfellinthenowpredominantlyGOGmarketofRomania,buthasfallenbackagainin2020,asimportsintoRomaniafromRussiadeclined,andtherewaslittlechangein2021.In2022,theOPEsharefellreflectingafallinpipelineimportsfromRussia.Figure58FiguSroeu5th6e-aSsotuEtuhreoapsetEPurircoepFeoPrrmicaetiFoonrm20a0t5iotno22000252to2022100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNP25Bosnia,Bulgaria,Croatia,FYROM,Romania,Serbia,Slovenia.WHOLESALEGASPRICESURVEY2023EDITION68AppendixARegionalLevelResultsFigure59FiguSrcean5d7i-nSacvaiandainndavBiaaltaincsdPBraiclteicFsoPrmricaetiFoonrm20t0io5nto2020052t2o2022100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNPInScandinaviaandBaltics26,GOGhasgainedgroundinrecentyearsinSweden,NorwayandmorerecentlyinLNGimportsintoLithuaniaandhadrisento60%in2016,almostallattheexpenseofOPE,whichisnowdownto10%.Theearlyswitchin2009fromBIMtoOPEwasinthecontiguousBalticStates.ThelargegaininGOGin2016reflected,inpart,theswitchfromNETandtoGOGinNorway,butlargelytheLNGimportsintoLithuanialinkedtoNBPprices.In2017GOGincreasedfurtherto60%withthemoveawayfromNPinNorway,asalldomesticproductionwaspricedatEuropeanhublevels27.GOGisnowat95%,havingrisensharplyin2021,asFinlandmovedtoGOGfromOPE,andagainin2022,asOPEpipelineimportsfromRussiafellaway.26Estonia,Finland,Latvia,Lithuania,Norway,Sweden.27PreviouslygasusedinrefineriesandgasprocessingwasthoughtnottobepricedsoallocatedtoNP.WHOLESALEGASPRICESURVEY2023EDITION69AppendixARegionalLevelResultsA.3ASIAA.3.1Asia2022SurveyResultsAsianconsumptionin2022wassome12%oftotalworldconsumption–495bcm.FigureF6ig0ure5A8s-iAasPiariPcreicFeoFrmoramtiaotnio2n0220222RSP13%BIM1%GOG19%OPE67%OPEat67%totalssome331bcmandisprincipallydomesticproduction,pipelineandLNGimportsinChina,LNGimportstogetherwithasmallamountofdomesticproductioninIndia,andLNGimportsanddomesticproductioninPakistanwheretheregulatorsetsgaswellheadpricesbutlinkedtotheoilprice.GOGat19%,some93bcm,islargelydomesticproductioninIndia,reflectingthemainlyhublinkedpricingformula,spotLNGimportsintoIndia,ChinaandPakistananddomesticproductioninChina,reflectingthedirectsalesofcoalbedmethaneatmarketpricesfromupstreamproducerstolargeusersinpowerandindustry.RCSaccountsforsome13%,totallingaround45bcmofdomesticproductioninChinawitharound20bcminBangladesh.ThesmallamountofBIMat1%-4bcm–isinBangladesh.WHOLESALEGASPRICESURVEY2023EDITION70AppendixARegionalLevelResultsA.3.2AsiaComparison2005to2022ThechangesinpriceformationmechanismsinAsiahavebeendominatedbyChinaandIndia.Firstly,therehasbeenanincreaseinOPEfromaround35%to67%overthefifteensurveys,largelyattheexpenseoftheregulatedcategoriesandBIM.ThemovefromBIMtoOPEreflectedthechangeinthepricingoftheQatarLNGcontracttoIndiabetween2007and2009,whilethemorerecentrisein2010and2012wasduetothestartofpipelineimportsintoChinafromTurkmenistan,whichareoilindexedunderthecontract.ThechangefromRSPtoRCSinChinain2009cameastheregulatorincreasedpricestoeconomiclevels.Finally,therewasthefurtherchangeindomesticproductionpricing,initiallyintwoprovincesinChina,beforeextendingnationwidetoallsectorsexceptresidentialandfertilizer,againincreasingOPEto67%in2016.In2018,OPEwas68%risingfrom64%in2017,asChinaextendedthepricingreformstocity-gatepricingtoresidentialcustomers.TheriseinGOGin2015tosome13.5%reflectedthepricingreforminIndia,linkingdomesticpricestoabasketofmarkethubprices.GOGincreasedfurtherin2017to14%andto17%in2018,partlyasspotLNGimportsincreasedinIndiaandChina.GOGsharerosein2019and2020,attheexpenseofOPE,reflectingafurtherincreaseinspotLNGimportsacrosstheregion.OPEandGOGroseagainin2021attheexpenseofRCSinChina.In2022theGOGsharedeclinedfrom22%in2021to19%asaresultofadropinspotLNGcargoesintoChinaandPakistan.Figure6161-AAssiiaaPPrriicceeFFoorrmmaattiioonn22000055ttoo22002222100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNPThechangesinRSP–downfrom48%in2005toalmostzeroin2015wasalmostallduetothechangeinpriceformationinChinaasregulatedpriceswereincreasedtoeconomiclevels,andthemorerecentchangeinIndia.Initially,RCSwasthebeneficiary,risingto44%by2012,butthishassincedeclinedwiththepricingchangesinChina,partlyoffsetbythemovetomoreRCSinBangladesh.ThedeclineinRBC,from10%in2005tozeroin2016,largelyreflectedchangesinpricinginBangladeshin2009and2015toRCSviaRSP.WHOLESALEGASPRICESURVEY2023EDITION71AppendixARegionalLevelResultsA.4ASIAPACIFICA.4.1AsiaPacific2022SurveyResultsAsiaPacificconsumptionin2022wassome9.5%oftotalworldconsumption–388bcm.FigureF6i2gure6A0s-iaAPsiaacPifaicciPﬁrcicPeriFcoerFmoarmtioantio2n0222022RSP10%NP1%RCS0%BIM1%GOG29%OPE59%OPEat59%totalssome229bcm,withLNGimports–predominantlyinJapan,KoreaandTaiwan,butalsonowincludingIndonesia,Singapore,ThailandandMalaysia–accountingfor133bcm.Pipelineimportsaresome13bcmintoSingapore,ThailandandMalaysia,whiledomesticproductionis83bcm–mostlyThailandbutalsoVietnam,Malaysia,AustraliaandthePhilippines.GOGat29%totalssome111bcm,ofwhich73bcmisLNGimportsmainlyinJapan,KoreaandTaiwan–butalsosomeinSingaporeandMalaysia,whilethebalanceisdomesticproductioninAustraliaandNewZealand.BIMatlessthan1%totalssome4bcm,comprisingdomesticproductioninJapan.RSPat10%totalssome40bcmandisdomesticproductioninIndonesia,whileRCShasalmostdisappearedandisdomesticproductioninSouthKoreaandChineseTaipei.NPat1%or3bcmisdomesticproductioninBruneiandPNGconsumedintheenergyindustry.WHOLESALEGASPRICESURVEY2023EDITION72AppendixARegionalLevelResultsA.4.2AsiaPacificComparison2005to2022Until2017,therewereonlyminorchangesinpriceformationmechanismsinAsiaPacificsince2005.GOGhadrisenfrom13%in2005toashighas22%in2012,whileOPEwasbroadlyunchanged,withRSPdownfrom22%to15%.After2012,GOGdeclinedthrough2016asspotLNGimportsfell.ThishassincebeenreversedbythesharprisesinspotLNGimportsinthelastfouryears.ThegradualdeclineinRCSto2016reflectedthechangingpricinginVietnamtowardsOPE.In2017,however,thereweresignificantchangesinMalaysia,withpricingmovingtoRCSandOPEindomesticproductionawayfromRSP,whichhasfallenfrom16%in2012to9%in2020.In2020therewasafurthersignificantchangeinMalaysiawhichchangedalmostallitsdomesticproductionpricingtoOPE,withpricesbeinglinkedtoanetbackpricefromLNGexports,andcompletelyin2021.GOGandRSProsein2021,withrisingLNG(mostlythetradedelement)forGOGandincreasedIndonesiadomesticproduction.TheOPEsharedeclinedin2022,aspipelineimportstoThailandandSingaporedeclined,whileGOGincreasedwithmorespotLNGintoSouthKoreaandChineseTaipei.Figure63AsiaPacificPriceFormation2005to2022Figure61-AsiaPaciﬁcPriceFormation2005to2022100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNPWHOLESALEGASPRICESURVEY2023EDITION73AppendixARegionalLevelResultsA.5LATINAMERICAA.5.1LatinAmerica2022SurveyResultsLatinAmericaconsumptionin2022wassome4%oftotalworldconsumption–around148bcm.FigureFi6g4ure62La-tLiantAinmAemricearicPariPceriFceorFmoramtioantio2n0222022RBC10%NP1%OPE20%RSP20%GOG28%RCS10%NET8%BIM3%OPEat20%totalssome29bcm,mainlydomesticproductioninBrazil,pipelineimportsintoBrazilandArgentinaandaproportionofLNGimportsintoChileandArgentina.GOGat28%totalssome42bcm,ofwhich26bcmisdomesticproductioninArgentina,ColombiaandPeru.ThebalanceisLNGimportsintoBrazil,Argentina,Chile,Colombia,PuertoRico,Jamaica,PanamaandDominicanRepublic.BIMat3%totalssome5bcmandisalldomesticproductiontothepowersectorinTrinidad.NETat8%totalssome11.5bcmandisthebalanceofdomesticproductioninTrinidadusedasafeedstockinpetrochemicals.RSPat20%totalssome30bcmandcomprisesdomesticproductioninArgentina,Peru,EcuadorandBolivia,plusasmallamountinBrazil.RCSat10%totalssome14bcmandisdomesticproductioninArgentina.RBCat10%totalssome15bcmandisdomesticproductioninVenezuelaandasmallamountinChile.NPat1%or1bcmisCubandomesticproduction.WHOLESALEGASPRICESURVEY2023EDITION74AppendixARegionalLevelResultsA.5.2LatinAmericaComparison2005to2022ThechangesinpriceformationmechanismsinLatinAmericahaveseenariseinGOGfrom4%to28%,adeclineinRSPfrom52%to20%andariseinRBCfrom0%to10%-thelatteralmostallinVenezuela.TheriseinGOGinpartisduetorisingspotLNGimportsinArgentinaandBrazil,andaswitchawayfromRSPtoGOGinArgentina,and,eventually,acompleteswitchfromRCStoGOGinColombia.InArgentina,thisreflectedproducersandmarketingentities,beingallowedtosellgasatunregulatedpricestolargeeligiblecustomers,suchaspowerplants.ThedeclineinOPEin2022reflectedlowerpipeandLNGimports,inpartduetolowerconsumptionwiththeregulateddomesticproductionincreasingshare.Figure65FigLuaretin63A-mLeartiicnaAPmriceeriFcoarPmriacteioFnor2m00a5titoon22002025to2022100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNPWHOLESALEGASPRICESURVEY2023EDITION75AppendixARegionalLevelResultsA.6FORMERSOVIETUNIONA.6.1FormerSovietUnion2022SurveyResultsFormerSovietUnionconsumptionin2022wassome17.5%oftotalworldconsumption–around713bcm.FigureFi6gu6re64F-oFrmoremreSroSvoievtieUtnUionnioPnrPicreicFeoFromrmataiotnio2n0220222OPE1%RBC14%GOG36%RSP10%RCS35%BIM4%RCSat35%isthelargestshare,totallingsome253bcmandisalmostallthemajorproportionofdomesticproductioninRussiatogetherwithmostofthedomesticproductioninAzerbaijan.RBCat14%or100bcmisdomesticproductioninKazakhstan,Turkmenistan,UzbekistanandasmallamountinAzerbaijan,whileRSPat10%or69bcmisaproportionofRussiadomesticproduction(soldtothepopulation)andUkrainedomesticproduction.GOGat36%totalssome254bcmandislargelydomesticproductiontotheeligiblelargecustomermarketinRussia,butalsopipelineimportsintoUkraineathubpricesfromEurope.OPEat1%or10bcmisallpipelineimportsintoRussia,whileBIMat4%or27bcmrepresentsotherpipelineimportsintheFSUregion,principallyfromRussiatoBelarus,butalsoArmenia,Georgia,Kazakhstan,Kyrgyzstan,MoldovaandTajikistan.WHOLESALEGASPRICESURVEY2023EDITION76AppendixARegionalLevelResultsA.6.2FormerSovietUnionComparison2005to2022TheFormerSovietUnionisanotherregion,likeEurope,wheretherehavebeensignificantchangesinpriceformationmechanisms,largelybasedaroundRussia.FromhavingdomesticproductioncompletelyintheRBCcategoryin2005,therewasaswitchtoGOGastheindependentproducersbegantocompetewitheachotherandGazpromtosellgastothepowersectorandlargeindustrials,andtherisingGazpromregulatedpricessawaswitchfromRBCtoRCS,althoughin2014theregulatedpricingtothepopulationsawamovefromRCStoRSP,maintainedin2015and2016.Theotherchangewasinintra-FSUtradewherepricingswitchedfromBIMtoOPE,particularlyintheRussiatoUkrainetrade,andthenduring2015whenUkrainebeganimportingfromEuropeathubpricessoswitchtoGOGfromOPE.RSPlostsharein2019,withRussiaandUkrainevolumeslower,whileNPdisappearedfromTurkmenistanwhichmovedwhollytoRBC.In2020,therewasafurtherswitchfromRCStoGOGinRussia,andin2021and2022GOGrosefurtherreflectingrisinggasdemandinRussia.Figure67FigurFeor6m5e-rFoSormvieetrUSnoivoinetPUrinceioFnoPrmriacetioFnor2m00a5titoon22002025to2022100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNPWHOLESALEGASPRICESURVEY2023EDITION77AppendixARegionalLevelResultsA.7AFRICAA.7.1Africa2022SurveyResultsAfricanconsumptionin2022wassome4%oftotalworldconsumption–around161bcm.FiguFriegu6r8e66-AAffrriiccaaPPrriicceeFFoorrmmaattiioonn22002222NP1%OPE2%GOG11%BIM8%RBC55%RCS20%RSP3%RBCat55%orsome89bcm,hasthelargestshareandisdomesticproductioninEgypt,AlgeriaandLibya.RCSat20%orsome32bcmisdomesticproductioninEgyptandNigeriapluspartofpipelineimportsfromNigeriatoGhana,BeninandTogo.RSPat3%orsome5bcmisdomesticproductioninEquatorialGuinea,Gabon,Ghana,Morocco,MozambiqueandTanzania.OPEat2%orsome4bcmcomprisespipelineimportsintoTunisiafromAlgeria,andaproportionofthepipelineimportsfromNigeriatoGhana,BeninandTogo,aswellasdomesticproductioninTunisia,SouthAfricaandpartofIvoryCoastandTanzania.GOGat11%orsome18bcmispartofdomesticproductioninNigeria(salestothenon-powersector)andSouthAfrica,pluspipelineimportsintoTunisiaandMorocco.BIMat8%orsome13bcmispipelineimportsintoSouthAfricafromMozambiqueandthebalanceofdomesticproductioninIvoryCoast,partofdomesticproductioninGhana,plusdomesticproductioninCameroon.NPat1%isAngola.WHOLESALEGASPRICESURVEY2023EDITION78AppendixARegionalLevelResultsA.7.2AfricaComparison2005to2022TherewasverylittlechangeinpriceformationmechanismsinAfricabetween2005and2014,apartfromtheswitchtoRSPfromRBCin2012inNigeria,withsomeGOGasnon-powermarketswerefreedup.However,in2015,NigeriandomesticproductionmovedagainfromRSPtoRCSaspricestopowerplantswereincreased,andalsoinEgypttherewasasimilarpartialmoveawayfromRBCtoRCSinsomesectors,plusthestart-upofspotLNGimports.In2017,RBCgainedattheexpenseofRCSandNETinEgyptaspricestothepowersectorwerekeptdownandregulatedtofertilizerplants.Themainchangesin2018wasadeclineinGOGasspotLNGimportsintoEgyptfellsharplyandanincreaseinRCSinEgyptwithmoreconsumptionmetbydomesticproduction.In2019and2020,OPEandGOGdeclinedastherewaslesstrade,withRCSrisingin2019asEgyptianproductionincreased.Theregionremainsdominated,however,byRBC,withgaspriceslargelysubsidised.In2021,GOGincreasedasSouthAfricaswitchedindomesticproductiontopricesbasedoninternationalhubpricesandNigeriademandincreased,withOPEdeclining.In2022,GOGgainedattheexpenseofOPEwithachangeinpipelineimportpricingintoTunisiaandthecessationofpipelineimportsintoMoroccofromAlgeria,partlyreplacedbyspotimportsfromSpain.Figure69FiguArefri6c7a-PArifcreicFaoPrmricaetiFoonr2m0a0t5ioton22002025to2022100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNPWHOLESALEGASPRICESURVEY2023EDITION79AppendixARegionalLevelResultsA.8MIDDLEEASTA.8.1MiddleEast2022SurveyResultsMiddleEastconsumptionin2022wassome13.5%oftotalworldconsumption–around550bcm.Figure70MiddleEastPriceFormation2022Figure68-MIddleEastPriceFormation2022NP0%GOG4%RBC3%OPE4%BIM14%RCS2%RSP73%RSPat73%or400bcmdominatestheregionandisdomesticproductioninIran,SaudiArabiaandtheUAEwithsmalleramountsinOmanandBahrain.RBCat3%or15bcmisdomesticproductioninIraqandSyria.RCSat2%or9bcmispartofIrandomesticproductionBIMat14%or79bcmispartlypipelineimportsfromQatartoUAEandOmananddomesticproductioninQatarandpartofIsraeldomesticproduction.OPEat4%or23bcmislargelypipelineimportsintoIranfromTurkmenistan,someLNGimportsintoKuwait,andmostofdomesticproductioninKuwait.GOGat4%or23bcmincludesspotLNGimportsintoKuwait,Jordan,UAEandIsrael,domesticproductiondeliveredtopetrochemicalplantsinIran,wherepricesarepartlylinkedtointernationalhubprices,anddomesticproductioninIsrael.NPisalmostzeroandisgasconsumedinYemen.WHOLESALEGASPRICESURVEY2023EDITION80AppendixARegionalLevelResultsA.8.2MiddleEastComparison2005to2022Figure71FigurMeid69dl-eMEaidsdtlPeriEcaesFtoPrrmicaetiFoonrm20a2t2ion2005to2022100%90%80%70%60%50%40%30%20%10%0%2005201020152016201720182019202020212022OPEGOGBIMNETRCSRSPRBCNPThechangesinpriceformationmechanismsintheMiddleEasthavealmosttotallytakenplacebetween2010and2012,whenpriceswereincreasedsignificantlyinIran,movingfromtheRBCcategorytotheRSPcategory.TheotherchangewasinsmallquantitiesofOPEandGOGasLNGbegantobeimportedintoKuwait,UAEand,in2015,intoJordan,plusthechangeingaspricingtopetrochemicalplantsinIran.KuwaitalsomoveddomesticproductionmoretowardsOPEin2016.LNGimportsare,however,slowlyincreasingintheregionwhichisintroducingmoremarketrelatedpricingintheformofbothOPEandGOG.In2020,GOGincreasedasaresultofchangesindomesticpricinginIsrael.Therewaslittlechangein2021and2022.WHOLESALEGASPRICESURVEY2023EDITION81Section1AppendixBSurveyMethodologyWHOLESALEGASPRICESURVEY2023EDITION82AppendixBSurveyMethodologyTheideaforasurveyofwholesalegaspriceformationmechanismsaroseatthebeginningofthetrienniumleadingtothe2009WorldGasConference.TheStrategy,EconomicsandRegulationProgrammeCommittee(PGCB)hadsetupanewsub-grouptoconsidergaspricing,withakeyremittocarryoutacomprehensiveanalysisofgaspriceformationmechanisms.Thesub-groupdecidedtocarryoutasurveyofcurrentpricingmechanismsaroundtheworld,notonlyforgastradedinternationally,butalsoforgasproducedandconsumedwithincountries.IGUmembersweresurveyedandprovidedthedataandthesurveyresponseswerecollatedandanalysedbythesub-group.The2009WorldGasConferenceinBuenosAirespresentedtheresultsofthesurveysfortheyears2005and2007.Twofurthersurveysfortheyears2009and2010wereundertakenandpresentedatthe2012WorldGasConferenceinKualaLumpur.Threesurveyswereundertakenandpresentedatthe2015WorldGasConferenceinParis,coveringtheyears2012,2013and2014.The2015wasthefirstinthetrienniumforthe2018WorldGasConferenceinWashingtonDC,2016wasthesecondand2017thethird.The2018,2019and2020surveysweremeanttobethethreeleadinguptothe2021WorldGasConferenceinDaegu,SouthKorea,butthiswaspostponeduntil2022,sothe2021surveywaspublishedaftertheWorldGasConference.Inthe2022surveyresponseswerereceivedfor85outof113markets,andtheseresponsescovered91%oftotalworldconsumption.Inpart,followingthestartofRussia-Ukrainewar,responsesweredifficulttogetforsomecountries,especiallyintheFormerSovietUnion,butestimateddataontheremainingmarkets,whereresponseswerenotreceived,wasresearchedbytheauthorofthereportand/orbasedonpastresponses.B.1DATACOLLECTIONThefocusofthegaspricingsub-group,andthesurveys,wasverymuchonwholesaleprices,whichcancoverawiderange.Infullyliberalisedtradedmarkets,suchastheUSAandtheUK,thewholesalepricewouldtypicallybeahubprice(e.g.HenryHubortheNBP).Inmanyothercountries,wheregasisimported,itcouldtypicallybeaborderprice.Themoredifficultcasesarecountrieswhereallgasconsumedissuppliedfromdomesticproduction,withnointernationaltrade(eitherimportsorexports)andtheconceptofawholesalepriceisnotrecognised.Insuchcasesthewholesalepricecouldbeapproximatedbywellheadpricesorcity-gateprices.Generally,thewholesalepriceislikelytobedeterminedsomewherebetweentheentrytothemainhigh-pressuretransmissionsystemandtheexitpointstolocaldistributioncompaniesorverylargeendusers.Theinitialdatacollectionwasdoneonacountrybasis.ThedatawerethencollatedtoaregionallevelusingthestandardIGUregionsshowninthefigurebelow.Mostoftheregionsaredefinedalongtheusualgeographiclines,althoughtheIGUincludesMexicoinNorthAmerica,anddividesAsiaintoaregionincludingtheIndiansub-continentplusChina,calledAsia,andanotherregionincludingtherestofAsiaplusAustralasiawhichiscalledAsiaPacific.Intermsoftheallocationbetweendifferentpriceformationmechanismsinanycountry,thegeneralruleisthatthewholesalepriceatthe“pointoffirstsale”inthecountryshouldbeconsidered.Forexample,ifgasentersacountryunderanoil-indexedcontractandisthenre-tradedatahubitisstillconsideredtobeintheoilpriceescalation(OPE)category.Dataforeachcountrywerecollectedinastandardformat.Asanexample,adatacollectionformfortheUKisshowninthefigurebelow.Individualcountrygasdemandmaybesuppliedfromacombinationofthreesources–domesticproduction,pipelineimportsandLNGimports(storageisignoredforthepurposeofthisanalysis).Thedemandisallocatedproratatodomesticproductionandimports(priceformationofgasWHOLESALEGASPRICESURVEY2023EDITION83AppendixBSurveyMethodologyexportedisnotcollected,thisiscollectedatthecountryofimport).Thevolumefiguresondomesticproductionandimportsallocatedtothedifferentpriceformationmechanismsinthisreportexcludethegaswhichisre-exported.Figure72IGURegionsForeachofthesethreesourcesdatawascollectedseparatelyonwhatpercentageofthewholesalepriceforthatcategoryisdeterminedbyeachmechanism.Insomecountries,onesinglemechanismwasfoundtocoveralltransactionsandthatmechanism,therefore,wasallocated100%.Inmanycases,however,severalmechanismswerefoundtobeoperating,inwhichcasesestimatesweremadeofthepercentagesforeachpricemechanism.Theonlyconstraintisthatthetotalforeachsourceofgas–domesticproduction,pipelineimportsandLNGimports–mustaddupto100%.Informationwasalsocollectedonwholesalepricelevels.Thiscoveredtheannualaveragepriceandthehighestmonthlyaveragepriceandlowestmonthlyaverageprice.Allpriceswereconvertedto$perMMBTU.Acommentssectionwasincludedtoidentifyandacknowledgethesourceoftheinformationandanyotherusefulinformation.AlldataintheIGUstudyongasvolumesforconsumption,production,importsandexportsistakenfromtheIEAdatabase,supplementedwherenecessarybyanyspecificcountryand/orregionalknowledge.Itshouldbenotedthat2021volumedataisstillpreliminaryandmaybeadjustedoncethefinalestimatesarepublishedlaterthisyearbytheIEA.Inaddition,previousyearsmayalsoberevised.Theserevisionsmayleadtosmallchangesinthepercentagesforeachpricecategorywhencountrydataisaggregatedatboththeregionalandworldlevel.WHOLESALEGASPRICESURVEY2023EDITION84AppendixBSurveyMethodologyFigure73DataCollectionFormCountryUnitedKingdomRegionEuropeVolumes2022:ConsumptionProductionImportsExportsBCMPipelineLNGPipelineLNG72.538.4WholesalePrice31.026.523.50.0FormationDomesticProductionPipelineImportsLNGOilPriceEscalationGas-on-Gas100%100%100%CompetitionBilateralMonopolyNetbackfromFinalProductRegulation:100.0%100.0%100.0%CostofServiceRegulation:SocialandPoliticalRegulation:BelowCostNoPriceNotKnownTotalEstimated2022AverageHighLowWholesalePrice$33.38$46.40$20.34Range($/MMBTU)WHOLESALEGASPRICESURVEY2023EDITION85AppendixBSurveyMethodologyB.2TYPESOFPRICEFORMATIONMECHANISMSInpreparationfortheinitial2005survey,aseriesofdiscussionswereheldatthePGCBmeetings28onthedefinitionofdifferenttypesofpriceformation.ItwasdecidedtouseforcategorisationpurposesthewholesalepricingmechanismsdescribedinBox2.OilPriceEscalation(OPE)PRICEFORMATIONMECHANISMSGas-on-GasCompetition(GOG)Thewholesalegaspriceislinked,usuallythroughabasepriceandanescalationclause,tocompetingfuels,typicallycrudeoil,gasoiland/orfueloil.Insomecases,coalpricescanbeusedascanelectricityprices.Thewholesalegaspriceisdeterminedbytheinterplayofdirectgassupplyanddemand–gas-on-gascompetition–andistradedoveravarietyofdifferentperiods(daily,monthly,annuallyorotherperiods).Thisincludesgastradedonashort-termhub-pricedbasisandlonger-termcontractsthatusegaspriceindicestodeterminethemonthlyprice.BilateralMonopoly(BIM)Thepriceisdeterminedbybilateraldiscussionsandagreementsbetweenalargesellerandalargebuyer,withthepricebeingfixedforaperiodoftime–typicallyoneyear.TheremaybeawrittencontractinplacebutoftenthearrangementisattheGovernmentorstate-ownedcompanylevel.NetbackfromFinalProduct(NET)Thepricereceivedbythegassupplierisafunctionofthepricereceivedbythebuyerforthefinalproductthebuyerproduces.Thismayoccurwherethegasisusedasafeedstockinchemicalplants,suchasammoniaormethanol,andisthemajorvariablecostinproducingtheproduct.Regulation:CostofService(RCS)Thepriceisdetermined,orapproved,formallybyaregulatoryauthority,orpossiblyaMinistry,butthelevelissettocoverthe“costofservice”,includingtherecoveryofinvestmentandareasonablerateofreturn.Regulation:SocialandPolitical(RSP)Thepriceisset,onanirregularbasisonapolitical/socialbasis,inresponsetotheneedtocoverincreasingcosts,orpossiblyasarevenueraisingexercise–ahybridbetweenRCSandRBC.Regulation:BelowCost(RBC)Thepriceisknowinglysetbelowtheaveragecostofproducingandtransportingthegasoftenasaformofstatesubsidytothepopulation.NoPrice(NP)ThegasproducediseitherprovidedfreetothepopulationandNotKnown(NK)industry,possiblyasafeedstockforchemicalandfertilizerplants,orinrefineryprocessesandenhancedoilrecovery.Thegasproducedmaybeassociatedwithoiland/orliquidsandtreatedasaby-product.Nodataorevidence.28TheWholesaleGasPricingGroupbeganlifeasSubGroup2ofPGCBandwaschairedintheperiodleadinguptothe2009WorldGasConferencebyRunarTjerslandofStatoilandbetween2009and2018byMikeFulwood,formerlyofNexant,butnowaSeniorResearchFellowattheOxfordInstituteforEnergyStudies.ItisnowpartoftheIGU’sStrategyCommitteeandhasbeenre-titledastheGasPricingGroup.The2018through2022surveyswereorganisedbyMikeFulwood,undertheguidanceoftheIGUStrategyCommittee.WHOLESALEGASPRICESURVEY2023EDITION86AppendixBSurveyMethodologyB.3ANALYSINGTHERESULTSInlookingatthedifferentpriceformationmechanisms,theresultshavegenerallybeenanalysedfromtheperspectiveoftheconsumingcountry.Withineachcountrygasconsumptioncancomefromoneofthreesources,ignoringwithdrawalsfrom(andinjectionsinto)storage–domesticproduction,importedbypipelineandimportedbyLNG.Inmanyinstances,aswillbeshownbelow,domesticproduction,whichisnotexported,ispriceddifferentlyfromgasavailableforexportandalsofromimportedgaswhetherbypipelineorLNG.Informationwascollectedforthesethreecategoriesseparatelyforeachcountryand,inaddition,pipelineandLNGimportswereaggregatedtogivetotalimportsandaddingtotalimportstodomesticproductiongivestotalconsumption.Foreachcountry,therefore,priceformationcouldbeconsideredin5differentcategories:•Domesticproduction(consumedwithinthecountry,i.e.notexported)•Pipelineimports•LNGimports•Totalimports(pipelineplusLNG)•Totalconsumption(domesticproductionplustotalimports)EachcountrywasthenconsideredtobepartofoneoftheIGUregions,asdescribedabove,andthe5categoriesreviewedforeachregion.Finally,theIGUregionswereaggregatedtogivetheresultsfortheWorldasawhole.Aswellascollectinginformationonpriceformationmechanismsbycountry,informationwasalsocollectedonwholesalepricelevelsineachcountry–anannualaveragepriceandarangeofhighandlowpriceswithintheyear.Comparisonsofwholesalepricelevels,however,needtobetreatedwithcaution.Thewholesalepricecancoverdifferentpointsinthegaschain–wellheadprice,borderprice,hubprice,city-gateprice–sothecomparisonofpricelevelsisnotalwaysalikeforlikecomparison.WHOLESALEGASPRICESURVEY2023EDITION87Section1AppendixCGlossaryWHOLESALEGASPRICESURVEY2023EDITION88AppendixCGlossaryBCM:Billionsofstandardcubicmetresofnaturalgas.MMBTU:MillionsofBritishThermalUnits–measurementoftheenergycontentofnaturalgasPriceFormationMechanisms:Categorisationofdifferentmethodsofhowwholesalepricesaredetermined.SpotLNG:SingleLNGcargoesormultipletendersorcontractsunderoneyearduration.TradingorTradedMarkets:Priceisdeterminedbytheinterplayofsupplyanddemandandistradedoveravarietyofdifferentperiods(daily,monthly,annuallyorotherperiods).Tradingtakesplaceatphysicalhubs(e.g.HenryHub)ornotionalhubs(e.g.NBPintheUK).Thiswillalsoincludelongertermcontractsintomarketswherethereislittleornotradingathubs,butwherethepriceislinkedtohubpricesinmarketswherethereisliquidtrading.WholesalePrice:Typically,ahubpricesuchasHenryHub,butcouldbeaborderpriceorinsomecountriesawellheadorcity-gateprice.Generally,thewholesalepriceislikelytobedeterminedsomewherebetweentheentrytothemainhigh-pressuretransmissionsystemandtheexitpointstolocaldistributioncompaniesorverylargeendusers.WHOLESALEGASPRICESURVEY2023EDITION89InternationalGasUnion(IGU)44SouthamptonBuildingsWC2A1APLondonUnitedKingdomTelephone:+440238890147E-mail:info@igu.orgPublishedbytheInternationalGasUnion(IGU)Copyright©2023.Theentirecontentofthispublicationisprotectedbycopyright,fulldetailsofwhichareavailablefromthepublisher.Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinretrievalsystemsortransmittedinanyformorbyanymeans–electronic,mechanical,photocopying,recordingorotherwise–withoutthepriorpermissionofthecopyrightowner.

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