# **I.** INTRODUCTION

The purpose of this paper is to provide a comprehensive listing of international natural gas prices; that is, the prices of natural gas traded between countries. It is a revision of Energy Development Information Note No. 9, issued in May 1988 and has been expanded to include some information about the international gas trades. No atLempt has been made to provide domestic natural gas prices except in a few instances for comparative purposes. Depending on the country, the import/export prices can be very open or extremely confidential. This paper reports on gas prices obtained on a non-confidential basis from the trade press, industry specialized groups such as Cedigaz and the Institute of Gas Technology and based on the latest information available.

Natural gas reserves are found in about ninety countries worldwide (see Table 1) and there is production in some 70 countries, similar to the number of countries producing oil. However, unlike oil which is widely traded internationally, only about 15Z of natural gas production is marketed beyond national boundar.as. Furthermore, most of the gas volume traded internationally is attributable three major gas importers: (1) imports by the United States from Canada, (2) Japanese LNG imports and (3) Western Europe imports which are about-one-half of its natural gas needs. The trade between developing countries is almost non-existent although there are some opportunities which could be developed. The Middle East with huge gas reserves and limited domestic demand beyond the petrochemical industry is looking for eventual exports both to European and Far East markets.

This year, the international gas market has been particularly active with strong competition in the European market as the Soviets, Norwegians and Algerians try to line up future sales agreements with Western European buyers. The world LNG market has become reactivated and its once dismal prospects appear to have been reversed. This is largely due to a more flexible and realistic attitude on the part of the exporters as to pricing and take-or-pay policies in order to keep LNG competitive as an energy source. Part of this realistic attitude comes from the fact that the exporters have high sunken fixed costs and have little choice but to continue to export. For example, the Algerians have been seeking to renew or expand exports to the United States. Potential new exporters, Norway and Nigeria, are also looking at th-e U.S. LNG market for the future. In the Far East, Japan, Taiwan and Korea are or will soon by LNG importers and a number of gas producing countries are looking to these Far East markets.

Unlike crude oil for which there are widely publicized international reference prices, there are no uniform international gas prices. Instead they are determined on a very local basis, depending on the costs of exploration and development, transmission costs and the prevailing prices in the market in which the gas competes. Nonetheless, the price in most international contracts is changed periodically based on an escalator or price adjustment clause linked to crude oil or oil product prices in the consumer country. Therefore, the gas prices worldwide tend to fall within a prescribed range, ie