Page 4 - GLNG Week 41

GLNG COMMENTARY GLNG
Examining the next wave of Asian demand growth
Both developed and developing countries in Asia are expected to drive up LNG demand, but the pace may slow in the nearer term and other obstacles remain
PERFORMANCE
WHAT:
LNG producers are still confident over the prospects for Asian demand.
WHY:
More and more Asian countries are looking to LNG, though the demand growth rate will likely slow.
WHAT NEXT:
Buyers may turn more to the spot market in the short term, prompting
a rethink of business models.
LNG producers are still looking to Asia to absorb much of the new supply coming onto the mar- ket in the next few years. These expectations seem largely well-founded given longer-term demand projections for the region, but there are a few complicating factors. Not least among these is a global economic slowdown that may dampen demand in the nearer term. Meanwhile, for developing Asian countries seeking sources of LNG supply, the cost of building significant new import infrastructure is more of a barrier than it was for leading LNG buyers such as Japan and South Korea. Nonetheless, LNG suppliers remain hopeful that the region’s demand trends will be strong overall.
Slower but steady
“We’re still pretty optimistic that there’s growth, and that that growth will continue over the next few decades,” Santos’ managing director and CEO, Kevin Gallagher, said last week at the 40th Oil & Money conference, hosted by Energy Intelligence in London and attended by News- Base. “I think those traditional Asian markets
particularly will continue to grow, but at a much more moderate rate than maybe we’ve seen in recent years. So we still expect some growth from the legacy markets, and we’ll see more growth from the Southeast Asian markets,” he added. “But it’s a slow growth, it’s not a rampant growth like we’ve seen in recent years in China.”
Other speakers and panellists at the confer- ence echoed similar expectations.
“If you look around the world today, you’ve got some of the less traditional buyers that are starting to really take hold of some significant volumes,” Tellurian’s senior vice-president of LNG marketing, Tarek Souki, said. “Ten years ago, who would have said Pakistan was going to be a 20-30mn tonne player? Nobody would have thought that, but here they are, and they’re on their way,” he added. “And you have places like Bangladesh. India is becoming a traditional buyer, but they’ve got a lot of growth ahead of them. And then you have other places around Southeast Asia that have just started their jour- ney, and I think when you take them all as a sum total, you’ll have something like a Korea or like a
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w w w . N E W S B A S E . c o m Week 41 17•October•2019