(EnergyAsia, April 17 2012, Tuesday) — Southeast Asia will be an attractive area for gas activity amid growing demand for energy in the region, according to the International Gas Union (IGU).
Globalenergy demand is expected to increase in tandem with growing population, economic expansion, individual’s prosperity and urbanisation. It is projected that the world will consume 35% to 40% more energy by 2030 than in 2005. Two-thirds of this future energy demand will come from emerging markets like China and India.
While the Asia Pacific region is the world’s second largest LNG exporter, it is also a fast-growing consumer with an annual average growth rate of 13.4% between 2000 and 2011.
China and India collectively accounted for about 25% of the region’s aggregate gas demand since 2008. The region’s smaller countries such as Pakistan, Bangladesh, Thailand, Vietnam, Singapore, Indonesia and Malaysia are also raising their gas demand.
“Active regasification projects in Southeast Asia are expected to set the stage for future economic developments in the region by averting gas shortages and enhancing long-term supply security,” said Abdul Rahim Hashim, President of the International Gas Union (IGU).
He said Southeast Asia will build up a total of 37 million tonnes/year of regasification capacity between 2011 and 2017: Thailand (2011), Malaysia (2012), Singapore (2013), Indonesia (2014), and Vietnam (2017).
Tight market ahead
China and India have considerably increased their LNG imports in recent years and together accounted for 15.2% of the total LNG imports in Asia in 2010. India and China are the biggest LNG buyers from Qatar and Australia.
The Fukushima nuclear disaster of March 2011 contributed to a substantial spike in oil, gas and coal demand across the Asia-Pacific region, and intensify competition for LNG supplies in the future.
IGU predicts that Southeast Asia’s leading economies, Indonesia, Thailand, Singapore, Malaysia and Vietnam will face tough competition for suppliers from Asia’s traditional LNG buyers, Japan, South Korea, Taiwan, China and India.
“Energy security has always and will remain as a strategic issue, against the backdrop of declining production and depleting reserves,” Dr Rahim said.
“It is imperative for ASEAN member countries to accelerate and embrace full gas market liberalisation. While subsidised gas prices continue to distort the market, and “artificially” boost higher demand, this is not sustainable in the long-term.”
As a result, Dr Rahim said Southeast Asian economies will have to pay more for their gas supplies.
While, oil has taken centre stage for much of the 20th century, natural gas is starting to gain prominence in recent years.
Geopolitics and natural gas will be a one of the four daily themes in the upcoming 25th World Gas Conference will examine the interplay between economic and political factors in the development of natural gas resources.
Due to the global nature of the gas industry and of concerns for energy security, the IGU established a special task force to conduct in-depth research on the subject over the past three years.
The 25th World Gas Conference (WGC2012) will be held in Kuala Lumpur on June 4-8, 2012.