Page 5 - AsianOil Week 36

AsianOil ASIA-PACIFIC AsianOil

Bloomberg reported on September 10 that Jap- While Thailand, Singapore, Malaysia, Paki-
anese utility Kyushu Electric Power intended stan, Indonesia, Bangladesh and Myanmar are
to allow a long-term supply deal with Indo- projected to import around 44 bcm in 2020,
nesia’s state major Pertamina to lapse once it this figure is expected to expand to 150-250
expires at the end of the year. bcm by 2050.
Kyushu Electric executive officer Hiroyuki With the likes of Vietnam, the Philippines,
Tsunetomi told the newswire that the supplies Sri Lanka and Cambodia either building
had become too expensive. The company is import facilities or actively discussing such
one of six Japanese fimrs that consolidated projects, the OIES expects emerging Asian
their supply contracts with Pertamina in 2009. markets to become as significant a growth
Fellow consortium member Toho Gas is also market as China and India.
unwilling to continue with the deal, the news- Despite price pressures over the last few
wire quoted an unnamed source as saying. years, Asia’s attractive long-term prospects
have continued to attract traders to the region.
Price pressures
Spot cargoes for delivery into East Asia ended Trader appeal
last week at $4.10 per mmBtu ($113.41 per 1,000 Singapore has touted the fact that it has managed
cubic metres), the highest point since mid-Janu- to continue growing the number of companies
ary and far above a record low of $1.85 ($51.17) with an LNG trading or business development
reported at the start of June. However, some presence over the last two years.
observers have questioned the sustainability The number of companies with dedicated
of that price bounce, pointing to benchmark LNG desks has climbed from 45 in September
increases in the US and UK driven by local 2018 to more than 50 at present, Singaporean
demand pressures there rather than a surge in Trade and Industry Minister Chan Chun Sing
demand from Asian buyers. told a virtual industry event on September 7.
Senior Bernstein oil and gas analyst Oswald “This includes key buyers of LNG such as
Clint told Reuters that delays on export pro- Osaka Gas setting up trading operations in
ject FIDs could last for another 12-18 months. Singapore, complementing the many suppliers
There was one positive take-away from this and independent trading companies already
for developers, though, with Clint noting that in the Singapore ecosystem,” he said.
project pushbacks would likely drive prices He added: “The growth of LNG derivatives
higher come 2025. trading has an important impact on the Asian
Moreover, Asia’s long-term LNG demand out- gas market, as liquidity and price transparency
look is strong, according to a new report by think- will lead to increased spot trading for the region,
tank Oxford Institute for Energy Studies (OIES). leading to a greater price influence out of Asia.”
It projected that waning demand from the likes of With demand projected to grow on the
Japan, South Korea and Taiwan would not only be back of Asia’s continued economic as well as
offset by China and India, but also from a raft of various countries’ efforts to replace coal with
emerging economies in Southeast Asia. gas, locating in Singapore appears a smart
The report, Emerging Asia LNG demand, move. Even more so, when considering that
noted that five key markets – Japan, China, an LNG price spike by the middle of the dec-
South Korea, India and Taiwan – accounted ade is entirely possible given current delays in
for 90% of total Asian LNG imports in 2019. sanctioning new supply capacity.™

Week 36 10•September•2020 www. NEWSBASE .com P5