Authors: A Mashayekhi,

The Economics of Natural Gas, Pricing, Planning & Policy

Natural gas is an under-exploited resource with considerable potential for future growth. Like oil, gas fulfils a wide variety of fuel and feedstock uses; but very little gas is traded internationally. The problems faced by countries intending to develop their natural gas reserves are very different from those of the established oil producers, for both economic and practical reasons.

This book provides a comprehensive survey of the major issues involved in the pricing of gas and in the planning of its development. It presents a theoretical framework for determining the ‘economic price’ of gas. This is then illustrated with sample calculations of both the costs of its exploration and development and benefits to be derived from its use in different economic sectors for a number of Third World countries.

The practical and political issues involved in the formulation of gas pricing policies are also discussed, and these are illustrated with a detailed case-study on Bangladesh.

The book concludes by describing how to formulate a ‘gas planning model’ for the development of gas reserves in actual countries. Thus it may be used both as a textbook on gas for students of natural resource economics, and also as a manual for government officials in developing countries that are contemplating the development of their gas reserves.


  1. Introduction
  2. The Analytical Framework
  3. An Overview of Natural Gas Supply and Demand
  4. The Economic Cost of Gas Development
  5. Gas Development Costs in Eight Countries
  6. Gas Benefit Valuation
  7. The Value of Gas in LNG Exports
  8. The Value of Gas in Power and Industry
  9. The Value of Gas in the Residential and Commercial Market
  10. The Principles of Gas Pricing
  11. Natural Gas Pricing in Bangladesh: a Case-Study
  12. A Practical Approach to Gas Planning