Page 9 - AsiaElecl Week 37

AsiaElec COMMENTARY AsiaElec

utility Kyushu Electric Power intended to allow While Thailand, Singapore, Malaysia, Paki-
a long-term supply deal with Indonesia’s state stan, Indonesia, Bangladesh and Myanmar are
major Pertamina to lapse once it expires at the projected to import around 44 bcm in 2020, this
end of the year. figure is expected to expand to 150-250 bcm by
Kyushu Electric executive officer Hiroyuki 2050.
Tsunetomi told the newswire that the supplies With the likes of Vietnam, the Philippines,
had become too expensive. The company is one Sri Lanka and Cambodia either building import
of six Japanese fimrs that consolidated their sup- facilities or actively discussing such projects,
ply contracts with Pertamina in 2009. Fellow the OIES expects emerging Asian markets to
consortium member Toho Gas is also unwilling become as significant a growth market as China
to continue with the deal, the newswire quoted and India.
an unnamed source as saying. Despite price pressures over the last few
years, Asia’s attractive long-term prospects have
Price pressures continued to attract traders to the region.
Spot cargoes for delivery into East Asia ended
last week at $4.10 per mmBtu ($113.41 per 1,000 Trader appeal
cubic metres), the highest point since mid-Janu- Singapore has touted the fact that it has managed
ary and far above a record low of $1.85 ($51.17) to continue growing the number of companies
reported at the start of June. However, some with an LNG trading or business development
observers have questioned the sustainability presence over the last two years.
of that price bounce, pointing to benchmark The number of companies with dedicated
increases in the US and UK driven by local LNG desks has climbed from 45 in September
demand pressures there rather than a surge in 2018 to more than 50 at present, Singaporean
demand from Asian buyers. Trade and Industry Minister Chan Chun Sing
Senior Bernstein oil and gas analyst Oswald told a virtual industry event on September 7.
Clint told Reuters that delays on export pro- “This includes key buyers of LNG such as
ject FIDs could last for another 12-18 months. Osaka Gas setting up trading operations in Sin-
There was one positive take-away from this for gapore, complementing the many suppliers and
developers, though, with Clint noting that pro- independent trading companies already in the
ject pushbacks would likely drive prices higher Singapore ecosystem,” he said.
come 2025. He added: “The growth of LNG derivatives
Moreover, Asia’s long-term LNG demand trading has an important impact on the Asian
outlook is strong, according to a new report by gas market, as liquidity and price transparency
think-tank Oxford Institute for Energy Studies will lead to increased spot trading for the region,
(OIES). It projected that waning demand from leading to a greater price influence out of Asia.”
the likes of Japan, South Korea and Taiwan With demand projected to grow on the back
would not only be offset by China and India, of Asia’s continued economic as well as various
but also from a raft of emerging economies in countries’ efforts to replace coal with gas, locat-
Southeast Asia. ing in Singapore appears a smart move. Even
The report, Emerging Asia LNG demand, more so, when considering that an LNG price
noted that five key markets – Japan, China, spike by the middle of the decade is entirely pos-
South Korea, India and Taiwan – accounted for sible given current delays in sanctioning new
90% of total Asian LNG imports in 2019. supply capacity. ™

Week 37 16•September•2020 www. NEWSBASE .com P9