The Asian natural gas market is growing to be the fastest in the world, according to the International Energy Agency's (IEA) latest report about Developing a Natural Gas Trading Hub in Asia.

The report's Southeast Asian launch was hosted by EMA on 1 March 2013, and attracted more than 300 participants from the industry. At the launch, Mr Laszlo Varro, IEA's Head of Gas, Coal and Power Division, announced that Asian gas demand is growing so rapidly that Australia's Gorgon LNG project — the largest natural gas investment in the world — would cover only six months of Asia's growth in demand.

While there are growth prospects for natural gas in Asia, Mr Varro said governments need to work towards price deregulation to enable the market to reach its full potential. He commented that current industry practices such as the indexation of natural gas to oil prices and long-term contracts are unlikely to be sustainable in the future.

In addition, with the lack of a competitive spot market for natural gas, there is little incentive to change current commercial practices. This limits the options for both consumers and producers.

Thus, IEA recommends the development of an Asian natural gas trading hub to better reflect supply and demand fundamentals, and to steer Asia's transition towards "green growth".

IEA considers Singapore to be one of the most promising candidates to become a natural gas hub in Asia. The opening of Singapore's LNG terminal in 2Q 2013 — the first open-access LNG terminal in Asia — is a significant first step in the right direction.