International natural gas market integration

Raymond Li, Roselyne Joyeux, Ronald D. Ripple

Research output: Publication in policy / professional / specialist journalArticle (for policy / professional audience)Academic researchpeer-review

47 Citations (Scopus)


We explore the relationships among the North American, European and Asian natural gas markets for evidence of convergence and integration for the January 1997 through May 2011 period. The analyses are conducted under a multivariate framework, so the dynamics among the prices can be captured without the necessity of identifying an anchor price series. We find evidence of convergence among the Japanese, Korean, Taiwanese and UK prices. The North American price displays behaviour that is distinct from this group of prices. We conclude that there is not a fully integrated international natural gas market. The integration between European (represented by NBP) and Asian geographic regions appears to be due primarily to underlying contractual mechanisms specifically linking natural gas prices to oil prices rather than the result of market supply and demand interactions. We also find that the relationship among the Asian markets has evolved with Japanese prices adjusting to changes in South Korean and Taiwanese prices.
Original languageEnglish
Number of pages21
Specialist publicationEnergy Journal
Publication statusPublished - 1 Jan 2014


  • Convergence
  • Market integration
  • Natural gas price

ASJC Scopus subject areas

  • Energy(all)
  • Economics and Econometrics


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