Southeast Asian demand for liquefied natural gas (LNG) will play a significant role in the global LNG trade as forecasts call for growing populations and economies in the region and demand for cleaner-burning natural gas.
According to the U.S. Energy Information Administration, Asia is expected to account for 48 percent of the world's population growth, 52 percent of global gross domestic product growth, and 64 percent of growth in primary energy consumption. Demand for LNG is expected to grow in China, India, Malaysia and Indonesia in the coming years, and Japan, which was devastated by an earthquake and tsunami in March, has boosted its LNG imports as nuclear power plants in the country remain offline.
Southeast Asian gas markets are often overlooked, but Thailand, Singapore, Indonesia, Malaysia, Vietnam and Bangladesh are expected to become LNG importers by 2017, Flex LNG reported in June. Regasification terminals are under construction in Indonesia, Malaysia, Singapore and Thailand, which previously did not have regasification capacity.
Thailand's first LNG receiving terminal is expected to begin operations this year.
Flex LNG is developing a floating LNG project in Papua New Guinea (PNG) with a proposed operations start-up date in 2014, which the company said is "perfect timing" for the anticipated wave of Asian LNG demand. Northeast Asia remains the dominant LNG market and is still experiencing solid growth, and the Fukushima disaster is greatly enhancing this growth, Flex LNG noted. "China and India are the new 'growth engines' in Asian LNG demand and strong growth is expected going forward," Flex LNG said.
According to a report by the International Gas Union, 60 percent, or 135.1 million tones/annum, of the world's LNG was consumed by the Asia-Pacific region in 2010. Sixty percent of that LNG was sourced from within the region; the remaining 40 percent was imported from other regions.
At the end of 2010, China and traditional LNG importers Japan, Taiwan and Korea had 280 million tones/annum, or 51 percent, of the world's regasification capacity. East Asia had accounted for between 75 percent and 80 percent through of the 1990s and early 2000s of the world's regasification capacity, but that share has declined since the mid-2000s due to new capacity in North America, Europe, and the emergence of LNG importing markets in South Asia, South America, and the Middle East.
Asian LNG markets represent three distinct demand groups, said Peter Cleary, VP of Corporate Strategy and Development of Santos Ltd., at the Asian Oil and Gas Conference on June 7. The first group, comprised of established LNG markets of Japan, South Korea, and Taiwan, are countries seeking supply security and diversification by fuel type. These countries have effectively locked in LNG demand, growing at steady incremental rates of between one percent and three percent of year.
The second group represents the growing mega-markets of China and India, which started to develop less than a decade ago but is expected to grow at 10 percent per year, and could be as significant as established markets.
Last month, Black & Veatch and Chemtex unveiled plans to design and build two new LNG facilities in Shaanxi Province, China. The facilities, located in Jingbian City and Yulin City, will be used to liquefy gas for vehicle fuel in the region, offsetting the use of diesel and gasoline. The Black & Veatch-Chemtex team has won five LNG projects in China since the beginning of 2011, and 13 since 2006.
The third group represents the emerging markets of Southeast Asia, including Singapore, Thailand, Malaysia, Indonesia, Vietnam and the Philippines. This group of emerging buyers includes some of Asia's "bedrock" producers who are now becoming importers, as is the case with Petronas purchasing 3.5 mtpa from the Gladstone LNG project in which Santos, Petronas, Total and Kogas are partners.
While future U.S. LNG exports will impact trade flows, Cleary said he believes Asia's demand for securing supplies from neighboring sources will preserve oil-linked prices for the foreseeable future. "Oil-linked pricing of LNG has been the commercial driver required to build real scale and tackle challenging gas developments. Oil-linked pricing has worked in Asia because buyers are comfortable that oil is an established, well understood and globally traded commodity," Cleary said.
With limited conventional gas resource, industrialized Asia and the emerging economies in that region are almost totally dependent on imported LNG from Southeast Asia, Australia and the Middle East. "This dependence places a high premium on security of supply, which is reflected in the region's dependence on long-term relatively high-priced contracts indexed to oil," according to a study by the Massachusetts Institute of Technology, The Future of Natural Gas
Posts
No comments:
Post a Comment