Asia should set up a regional spot market for natural gas trading to reduce its high acquisition costs, the International Energy Agency (IEA) chief said on Monday.
Pointing to Shanghai -- which established a domestic natural gas spot trading platform in July -- IEA executive director Maria van der Hoeven said the whole region needs a similar platform.
"I think it's of the utmost importance that in Asia there needs... to be developed a spot market for gas because it's not there at the moment," she said at an energy conference in Singapore.
"Japan imported LNG at $18 MMBtu ($18 per million British thermal units) this summer, compared to $3 MMBtu prices in the United States and $10 to $12 in Europe," she added.
"And this considerable price is raising questions, in Europe and Asia, about appropriate gas pricing."
Van der Hoeven said a natural gas spot market would allow prices to be set "depending on rate of supply and demand fundamentals" without being influenced by other markets such as crude.
An IEA report issued in June estimated that global natural gas consumption will rise 17 percent to 3.94 trillion cubic metres by 2017 from 2011, with Asia powering demand growth.
"Asia will be by far the fastest-growing region, driven primarily by China, which will emerge as the third largest gas user by 2013," the report said.
The United States is currently the top consumer followed by Russia, according to the IEA.
Despite Shanghai's head start in its natural gas spot trading market, Van der Hoeven said Singapore was "in a good position" to be the first to establish a similar platform that serves the region.
"Its key location, experience with oil trading, advanced institutional development, they are all major advantages," she said.
"Other hubs, particularly in China, may in the future provide the ability on a great scale, but Singapore's advanced progress is a milestone for Asian gas."
Singapore is already a major Asian oil refining and trading hub.
"Maybe the volumes might be bigger in Shanghai, but there are a number of advantages here that would make it possible for Singapore to be first in the market," van der Hoeven said.