IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v127y2019icp11-18.html
   My bibliography  Save this article

Assessment of import risks for natural gas and its implication for optimal importing strategies: A case study of China

Author

Listed:
  • Kong, Zhaoyang
  • Lu, Xi
  • Jiang, Qingzhe
  • Dong, Xiucheng
  • Liu, Guixian
  • Elbot, Noah
  • Zhang, Zhonghua
  • Chen, Shi

Abstract

China's growing dependence on foreign natural gas has garnered increased attention to import risks and exposure. The purpose of this study is to serve as a vital guide in formulating an energy policy framework that aims at assessing and mitigating the impacts of natural gas import risks (NGIR). First, the paper constructs a NGIR evaluation framework with full consideration of resource risk, political risk, transport risk, price volatility risk, purchasing power risk and dependence risk. The relative weight of various risk factors is also identified for importing gas from different sources. Building on this, we use a linear programming model to optimize China's gas import sources based on the minimization of import risks. The results show that China's NGIR exhibited increasing trends in 2010–2014, with variation in the largest risk factors by national gas supplier. For Turkmenistan and Indonesia, the greatest risk is dependence; for Qatar, price volatility risk; for Yemen, Australia and Uzbekistan, resource risk; and for Malaysia, purchasing power risk. Along with other policy recommendations, our optimization results indicate that increasing the proportion of Chinese gas imports from potential suppliers, such as Russia and the United States, is an effective approach to reduce NGIR.

Suggested Citation

  • Kong, Zhaoyang & Lu, Xi & Jiang, Qingzhe & Dong, Xiucheng & Liu, Guixian & Elbot, Noah & Zhang, Zhonghua & Chen, Shi, 2019. "Assessment of import risks for natural gas and its implication for optimal importing strategies: A case study of China," Energy Policy, Elsevier, vol. 127(C), pages 11-18.
  • Handle: RePEc:eee:enepol:v:127:y:2019:i:c:p:11-18
    DOI: 10.1016/j.enpol.2018.11.041
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421518307717
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Geng, Jiang-Bo & Ji, Qiang & Fan, Ying, 2014. "A dynamic analysis on global natural gas trade network," Applied Energy, Elsevier, vol. 132(C), pages 23-33.
    2. Mujiyanto, Sugeng & Tiess, Günter, 2013. "Secure energy supply in 2025: Indonesia's need for an energy policy strategy," Energy Policy, Elsevier, vol. 61(C), pages 31-41.
    3. Sun, Mei & Gao, Cuixia & Shen, Bo, 2014. "Quantifying China's oil import risks and the impact on the national economy," Energy Policy, Elsevier, vol. 67(C), pages 605-611.
    4. Gómez, Antonio & Dopazo, César & Fueyo, Norberto, 2015. "The future of energy in Uzbekistan," Energy, Elsevier, vol. 85(C), pages 329-338.
    5. He, Peijun & Ng, Tsan Sheng & Su, Bin, 2015. "Energy import resilience with input–output linear programming models," Energy Economics, Elsevier, vol. 50(C), pages 215-226.
    6. Wu, Gang & Liu, Lan-Cui & Wei, Yi-Ming, 2009. "Comparison of China's oil import risk: Results based on portfolio theory and a diversification index approach," Energy Policy, Elsevier, vol. 37(9), pages 3557-3565, September.
    7. Zhang, Hai-Ying & Ji, Qiang & Fan, Ying, 2013. "An evaluation framework for oil import security based on the supply chain with a case study focused on China," Energy Economics, Elsevier, vol. 38(C), pages 87-95.
    8. Lee, Yusin, 2014. "Opportunities and risks in Turkmenistan’s quest for diversification of its gas export routes," Energy Policy, Elsevier, vol. 74(C), pages 330-339.
    9. Cabalu, Helen, 2010. "Indicators of security of natural gas supply in Asia," Energy Policy, Elsevier, vol. 38(1), pages 218-225, January.
    10. Ge, Fenglong & Fan, Ying, 2013. "Quantifying the risk to crude oil imports in China: An improved portfolio approach," Energy Economics, Elsevier, vol. 40(C), pages 72-80.
    11. Odgaard, Ole & Delman, Jørgen, 2014. "China׳s energy security and its challenges towards 2035," Energy Policy, Elsevier, vol. 71(C), pages 107-117.
    12. Zhaoyang Kong & Xiucheng Dong & Zhongbing Zhou, 2015. "Seasonal Imbalances in Natural Gas Imports in Major Northeast Asian Countries: Variations, Reasons, Outlooks and Countermeasures," Sustainability, MDPI, Open Access Journal, vol. 7(2), pages 1-22, February.
    13. Lu, Weiwei & Su, Meirong & Zhang, Yan & Yang, Zhifeng & Chen, Bin & Liu, Gengyuan, 2014. "Assessment of energy security in China based on ecological network analysis: A perspective from the security of crude oil supply," Energy Policy, Elsevier, vol. 74(C), pages 406-413.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhu, Jianhua & Peng, Yan & Gong, Zhuping & Sun, Yanming & Lai, Chaoan & Wang, Qing & Zhu, Xiaojun & Gan, Zhongxue, 2019. "Dynamic analysis of SNG and PNG supply: The stability and robustness view #," Energy, Elsevier, vol. 185(C), pages 717-729.
    2. Shule Li & Jingjing Yan & Qiuming Pei & Jinghua Sha & Siyu Mou & Yong Xiao, 2019. "Risk Identification and Evaluation of the Long-term Supply of Manganese Mines in China Based on the VW-BGR Method," Sustainability, MDPI, Open Access Journal, vol. 11(9), pages 1-23, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:127:y:2019:i:c:p:11-18. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Haili He). General contact details of provider: http://www.elsevier.com/locate/enpol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.