Freeman Spogli Institute for International Studies Program on Energy and Sustainable Development Stanford University


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Institutions and Gas Market Security


Mark H. Hayes

Published by
Stanford, 2007

The developing LNG trade does not have symmetric participants. LNG buyers in continental European and Japan tend to be monopoly gas and electricity companies with incentive and financial ability to sign long-term contracts. In contrast, prospective LNG buyers in the US and the UK participate in competitive wholesale markets and regulatory oversight with disincentives for volume commitments. As a result, integrated LNG sellers use US and UK as "markets of last resort" with implications for variability in actual LNG deliveries and for the division of rents in the growing LNG trade.

This text is a working paper version of Chapter 5 in Mark Hayes' doctoral dissertation to be published in 2007 by Stanford University Press.