Page 12 - GLNG Week 36

GLNG COMMENTARY GLNG

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

P12 www. NEWSBASE .com Week 36 11•September•2020