Asia heralds gas boom - New study trumpets need for big supply boost
Upstream, May 9
By Dan Rigden
South-east Asia will require more than 15 trillion cubic feet of gas supplies above existing contracts over the next 15 years to satisfy demand as markets emerge from a period of stagnation, according to a major new study.
By 2015 there will be a need for a further 6 billion cubic feet of gas supply per day in the Thailand/Java corridor, more than the total current demand in the region, according to an in depth study by Edinburgh-based oil and gas consultant Wood Mackenzie.
The Thailand/Java corridor, encompassing the gas markets of Thailand, Malaysia, Singapore, Sumatra and Java and the gas supply areas of Myanmar, Thailand, Vietnam, Malaysia and Indonesia, is developing as a distinct and self-contained region within South-east Asia for the supply and distribution of gas, noted Wood Mackenzie.
Security of supply concerns are stimulating cross-border gas trade in the corridor and an extensive transmission network is evolving, however, the evolution of the supply/demand picture in this area is difficult to predict.
"While it is clear that an overhang of gas supply still exists in some markets, the primary gas buyers are re-positioning themselves for a return to growth. Issues of security of supply, price and supply flexibility remain key and attention is focused on both domestic and cross-border resources," the report said.
Wood Mackenzie noted that post-crisis there has been a general shift in contracting away from Thailand towards Malaysia and Singapore. "It is predicted that Thailand will interact little with the remainder of the Thailand/Java corridor during the next 15 years but there will be significant interaction between the other regions," the study revealed.
Gas supplies in the West Natuna Sea and Sumatra will become of key strategic importance for the markets of Malaysia and Singapore. For the market of Java, local reserves potential seems limited and thus a call on gas from Sumatra and/or LNG may be required.
The consultant said the Asean gas grid seems increasingly likely to emerge from a bottom-up integration of individual projects, rather than from any top-down unified efforts by the region’s political leaders. "While the ASEAN gas grid is not developing as originally envisaged our analysis suggests that, by 2015, a largely interconnected gas pipeline network from Myanmar to Java could become a reality," Wood Mackenzie concluded. |
