The LNG-dependent countries of Asia Pacific paid the world's highest wholesale prices for gas in 2015, according to a new survey from the International Gas Union.
Wholesale prices for gas were highest in South Korea at more than $10/MMBtu, with Japan also paying double-digit figures, the IGU's Wholesale Gas Price Survey for 2016 showed.
The third-highest wholesale price was in China at just below $10/MMBtu, where domestic prices did not fully reflect declining oil prices until November, the IGU said.
The average wholesale price in Japan in 2015 was $10.36/MMBtu, down from $15.98/MMBtu in 2014.
Contract prices in Japan, which is the world's largest LNG importer, did not begin to fall significantly until the first quarter of 2015 as the lag effect of falling crude oil prices began to feed through, the IGU said.
The price in China declined only marginally to $9.67/MMBtu in 2015, from $10.56/MMBtu in 2014, as the adjustment to city gate prices, formally linked to oil product prices and LPG, were delayed.
In addition, the delivered prices of pipeline gas from Turkmenistan to the key east coast markets contain significant fixed transit and transportation elements, the IGU said.
In India, prices rose to $7.94/MMBtu in 2015, from 2014's $6.80/MMBtu.
The increase reflected a full year of the new hub-linked pricing formula for domestic production and the price of the Qatar LNG contract, since renegotiated from the start of 2016, remaining high because of long lags.
Prices have fallen further in the first quarter of 2016, the IGU said.
Prices in the first quarter were $7.50/MMbtu in Japan, $7.54/MMBtu in China and $5.50/MMBtu in India, the IGU estimated, with the markets in China and India catching up in the declines as the inertia in their pricing systems begins to reflect prices for spot gas and oil.
The Platts JKM for spot LNG cargoes delivered in June fell by 25 cents over the week to May 6, closing at $4.50/MMBtu.
At the low end of the scale, Australia enjoyed the cheapest wholesale gas prices in Asia Pacific, at less than $4/MMBtu for 2015, compared with a regional average of more than $8/MMBtu, the IGU said. Australia, which is on its way to becoming the world's largest LNG exporter, also enjoyed lower wholesale gas prices than its two regional LNG export competitors, Malaysia and Indonesia.
"Global energy pricing has entered a new paradigm," IGU President David Carroll said in the report. "While $70 (and higher) crude was the norm for many years, we are now uncertain about when to expect a rebound to historical trading ranges," he added.
"Gas industry dynamics are also changing," Carroll said. "Projects approved several years ago in a more robust pricing environment are now coming on stream. This supply abundance has affected gas hub and spot pricing levels and shifts in the wholesale price formation mechanisms are occurring."
Global consumption of gas in 2015 was around 3,554.8 Bcm, up from 3,506.2 Bcm in 2014, with Asia Pacific accounting for 399.9 Bcm, the IGU figures showed.
Domestic production accounted for 73% of total world consumption, or around 2,590 Bcm, with pipeline imports accounting for around 637 Bcm and LNG imports accounting for about 330 Bcm.
Asia Pacific is the world's second-largest importing region behind Europe. Asia Pacific's imports of gas via pipeline and as LNG totaled 221.0 Bcm in 2015, with global imports recorded at 966.3 Bcm.
