A Cooperative Game between Gas Exporting Countries Forum Members in LNG Export

Document Type : Research Paper


1 Associate Professor, Ferdowsi University of Mashhad, Iran

2 PhD student of Energy Economics, Ferdowsi University of Mashhad, Iran


Establishment of the Gas Exporting Countries Forum in Tehran in 2001 has proved to be one of the most important changes in the gas market. GECF has a considerable share in the world Liquefied Natural Gas (LNG) trade. Facts show that current routes of LNG trade are not optimal. Hence, in this paper we examine the development of cooperative strategies between countries exporting (LNG) and members of the Gas Exporting Countries Forum (GECF). To follow this goal, first we study the statue of GECF members in gas market, and then using a simple linear programing approach we find the optimal LNG trade routes for GECF members. The numerical results suggest that, in the absence of geopolitical problems, this cooperative strategy will probably be a rational move for all of the LNG exporters. The problem of gain sharing is then formulated using cooperative game theory concepts.