Qatargas CEO Khalid bin Khalifa Al Thani addressing the SIEW.
DOHA: Asian economies are demanding not only more energy but also cleaner and more flexible energy sources with LNG expected to fill a sizable part of such demand, Qatargas CEO Khalid bin Khalifa Al Thani said at a high-profile energy conference.
Delivering the opening keynote address at the just-concluded Singapore International Energy Week (SIEW), he said: “In 2012, Asia imported an additional 15.6 million tonnes of LNG over the 2011 figure which represents a year-on-year increase of 10 percent. As a consequence of its nuclear reactors shutdown, Japan alone represented over 50 percent of the Asian LNG consumption growth with imports reaching 87.5MT in 2012.”
He noted over the next three years, new LNG receiving terminals with a total capacity of 23 MTA will be added in China alone. Moreover, there are currently a dozen new LNG terminal projects at various planning stages. Similarly, India is expanding its LNG receiving capacity and its gas pipeline network will pave the way for increased imports over the coming years.
“South East Asian LNG demand is expected to be well over 40 million tonnes per annum by 2025 and will account for 13 percent of total Asia Pacific demand. Several factors are driving this increasing LNG demand, including this region’s strong economic growth, the need for diversified gas supplies and to offset declining legacy and remote gas supply sources.”
On the current LNG scenario in Europe, the Qatargas CEO said: “The continued economic slowdown coupled with the impact of European energy and climate change policies and their unintended effects on the energy markets has seriously dampened and even reversed in some cases the growth of gas consumption that was achieved in the continent during the last decade.”
However, his outlook on the future of the European LNG market was positive. “There is no doubt that the European economies will start recovering in the near future and consequently, gas consumption growth will return. While at the same time, European domestic gas production continues to decline. We are therefore hopeful that the serious loopholes and inconsistencies in energy and climate change policies will be addressed and corrected soon to encourage long term investment in gas infrastructure and enhance the energy security of Europe,” he said.
On the pricing structure, he noted that gas prices will remain regionalised for the foreseeable future and the North American exports pricing structure will not allow to significantly alter the current pricing structure in the regional markets of Europe and Asia. He said he was of the view that the opinion that the current expectations from consumers regarding the long-term LNG supply/demand balance and price trend may be overly optimistic.
“We believe that gas demand is outstripping gas supply especially in the Asia-Pacific region and that traditional forms of contracting will still be required to encourage sufficient growth in LNG supply.”