LNG set to slake Asia’s energy thirst
Demand for natural gas in the Asia Pacific region is projected to expand at 3.9% per year, hitting 1.46 billion tonnes of oil equivalent (toe) by 2035, up from 566 million toe in 2010, driving demand for liquefied natural gas (LNG) in gas-short Asia
OVER half (51.7%) of the entire growth in natural gas demand between 2010 and 2035 in the Asia Pacific will come from China, followed by India (13.0%), Indonesia (6.0%), and Japan (4.8%), according to latest forecast from the Asian Development Bank (ADB).
More regional interdependence with gas-rich members, such as Australia, Azerbaijan, Turkmenistan and Uzbekistan, will enhance energy security. But bringing the natural gas supply from landlocked sites to the demand centres via pipeline may prove challenging, particularly in Central and West Asia, says the ADB.
Financing such supply projects needs strong commitment from both exporters and importers to guarantee long-term demand for, and supply of, natural gas.
Moreover, some countries – China, South Korea, Taiwan, Japan, Singapore and Thailand – may increasingly depend on LNG imports.
But the development of LNG facilities needs large amounts of investment. As a result the super-cooled gas will continue to be traded under long-term contracts, says the Manila-based bank.
The consensus among industry leaders talking on the panel, New dynamics of Asian LNG markets at WEC 2013 is that long-term supply contracts will continue to underpin export projects.
Otherwise project developers will be unable to secure financing for the capital-intensive infrastructure needed to produce and export LNG.
While the panel agreed the LNG market is evolving in Asia, gradually becoming more liquid, with even the possibility of trading hubs, long-term foundation buyers will still be crucial to expand LNG supplies.