This paper discusses the rising profile of natural gas in global energy, factors constraining its further development, the gas contracting process, and the absence of a global market, which is analyzed in the context of the economic rent in the gas price and the opaque nature of gas contracts. A proposal for rationalizing the trade to ease these constraints is offered. Gas pricing, and factors driving demand are also analyzed using evidence from the literature. FDI can help to monetize some of the 'stranded' gas reserves, but success would depend on an investor-friendly climate, including appropriate tariff regimes in the domestic markets.
constraints facing the industry is through third party access (TPA) arrangements, under which an outsidegasexporter is given access to the pipeline network of local operators so long as spare capacity exists. This is at the heart of the deregulation process in the European Union, and has made gas trade more competitive. 10 While this is expected to ease the constraint somewhat, the fact remains that the pipeline capacity is limited, and would have to be expanded to accommodate increasing demands from third parties. Besides, there is still some resistance to the concept