Viability of Natural-Gas Projects for Northeast Asia A Presentation By Arlon Tussing & Sam Van Vactor Ulaanbaatar, Mongolia - August 16-18, 1998
Natural Gas Potential Economically Efficient Environmentally Beneficial Pipeline Gas Has Economies of Scale
Cost & Value Volume Impact of Economies of Scale LNG Compared to PNG PNG Demand LNG Significant Potential to Lower Cost for Producers and Prices for Consumers But, PNG Depends on High Volume
High Volume PNG Gas Supply Concentrations Largest Possible Market Aggregations
Gas Supply Concentrations Favorable Geology Unified operating management Unified political jurisdiction Coordinated transportation
Largest Possible Market Aggregations Special Effort to Organize the Japanese Market Korean Market may lack adequate demand for PNG China will be largest consumer with greatest benefits Russian domestic gas needs may retard projects
Japanese Domestic Transmission Necessary for economies of scale Greater Reliability and flexibility Integrates Japanese market Better balancing and storage Price diversity -- firm and non-firm
Energy Security Japan adopted principle of “diversity” Cross-border pipelines complex History defies the theory
Single Buyer Multiple Buyers Multiple Sellers Single Seller Energy Security Secure At Risk
Single Seller/Single Buyer Mutual Interdependence “Bilateral Monopoly” Multiple Sellers/Multiple Buyers Diversity Competition Single Buyers or Seller Monopoly Monopsony Multiple Sellers/Multiple Buyers Diversity Competition