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Downward drift

Gas production across the region is set to decline, with China the major exception, leading to increasing LNG imports

After peaking at over 440bn cubic metres a year in 2015, gas production in Asia is predicted to start gradually declining in the coming decade. Indonesia, Pakistan, Thailand, Bangladesh, Myanmar—and to some extent Malaysia—will see falling indigenous production from established reserve bases.

By 2030, gas production in Asia is predicted at just over 390bn cm/y, according to Rystad Energy, representing an annual average reduction of 0.8%.

Gas production is set to increase most markedly in China, where output will rise from 120bn cm/y in 2016 to around 150bn cm/y by 2030, surpassing all other Asian nations. Dominant producer PetroChina has been steadily building gas production capacity across Asia since 2004.

PetroChina's production capacity is set to peak at over 80bn cm/y in 2018-19 before dropping to around 70bn cm/y by 2030. Sinopec and Cnooc have also been building gas-production capacity region-wide with 35bn cm/y and nearly 20bn cm/y respectively due to be installed by 2030.

Papua New Guinea will see indigenous gas production nearly double from 15bn cm/y in 2015 to just under 30bn cm/y by 2030, as upstream investment supports ExxonMobil's PNG LNG and Total's planned Papua LNG export projects. Vietnam, which has seen gas production plateau at around 10bn cm/y since 2013, is predicted to marginally increase output to some 15bn cm/y by 2030.

India's gas production will rise steadily over the medium term, from 30bn cm/y in 2014 to a peak of just over 50bn cm/y by 2026, before dropping to around 40bn cm/y by 2030, according to Rystad Energy forecasts. This is in line with dominant producer ONGC's gas production outlook. This will rise from 25bn cm/y in 2014 to peak at 30bn cm/y in 2026 if no further reserves are developed in India, forcing the country to rely more on liquefied natural gas imports to make up shortfalls in supply as demand rises.

The most marked drop in domestic gas production in the region is forecast in Indonesia, Southeast Asia's largest economy. Output is forecast to fall from a peak of 75bn cm/y in 2010 to around 51bn cm/y by 2030, assuming no new investment between then and now. In recent years, falling oil prices have constrained upstream investment by state-owned Pertamina—Asia's second-largest gas producer after PetroChina. Also, a challenging regulatory environment has deterred oil and gas majors from exploration activities.

Rising energy demand means Indonesia is likely to become a net importer of gas by 2020, with a resultant shift to LNG imports on the cards. Further out, there's a chance sizeable finds, such as the giant East Natuna gas project, could be developed. But the withdrawal of Exxon and Thailand's PTTEP from the project last year makes this unlikely unless the government takes significant steps to support new developments of this sort.

With a growing population and economy, Pakistan has been struggling to maintain gas production at required rates, with output forecast to fall from a peak of 39bn cm/y in 2015 to around 16bn cm/y by 2030. In response, Pakistan is set to ramp up its LNG imports in the years ahead. A consortium comprising Pakistan's Oil and Gas Development Company and Pakistan Petroleum is also investigating the potential for shale-gas extraction in the country.

In Thailand, indigenous gas production peaked at 31bn cm/y in 2015-16, but is set to decline to just 7bn cm/y by 2030. Dwindling upstream reserves and uncertainty over pipeline gas imports from Myanmar—which is looking to use more gas to serve its growing domestic market—will result in Thailand importing more LNG in the coming years. PTTEP is also investing in gas projects elsewhere in Southeast Asia to enhance upstream reserves and production.

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