Industry Trend Analysis - Southeast Asia LNG Imports Set To Triple - FEB 2017 Asia January 2017 / Asia / Industry BMI View:Southeast Asia's demand for LNG imports is set to nearly triple in the next fouryears, as favourable pricing dynamics, rising demand for power andagrowingpreferencefor cleaner energy sources support greater investment intoregasification capacity expansion projects across the region.
Total LNG imports by countries in Southeast Asia, namely Thailand, Indonesia, Vietnam, the Philippines and Singapore, are set to nearly triple over the next four years (2017-2020). Efforts to reduce domestic energy shortages and ensure continuous economic growth, alongside favourable prices and growing interest in fostering cleaner energy alternatives, will fuel greater demand for LNG and brighten the outlook for capacity expansion projects in the pipeline:
Indonesia - The country's well-documented upstream woes and the disconnect between gas production sites and demand centres will see Indonesia become a net importer of the LNG by 2020 ( see'LNG To See Structural Growth On Rising Demand, Falling Output', October 17). In anticipation of the imminent gas deficit, national oil company (NOC) Pertamina has stepped up efforts to boost import capacity. In 2015, Pertamina successfully converted the Arun LNG export terminal into a regasification facility with a nameplate capacity of 4.1bcm. The NOC is also working with the Kalla Group to build a 5.5bcm regasification facility at Banjarnegara, Baten by 2020. Earlier in the year, the Ministry of Energy and Mineral Resources announced plans to expand its FSRU fleet to nine in the next five years (from two, currently) to meet rising demand for power.
Philippines - The imminent start-up of Energy World Corporation's Pagbilao LNG in 2017 will see the Philippines import LNG for the first time. More projects could be on the way, with Shell and Total keenly exploring for opportunities in the FSRU space. First Gen has taken an FID to build an onshore terminal at Batangas Bay by 2021.
Singapore - Completion of Phase III expansion at Jurong Island LNG will increase its capacity from 7.5bcm currently to 15.0bcm by 2018, and operator SLNG believes that the site is big enough to accommodate a fourth expansion. Outlook on projects in Singapore are good, as the country phases out pipeline gas imports from Malaysia and Indonesia, and seeks to build up greater LNG liquidity in line with its ambition to become a regional gas trading and bunkering hub.
Thailand - State-owned PTT PCL is on course to double capacity at the Map Ta Phut LNG terminal at Rayong province to 13.8bcm by March 2017. Thailand's reliance on LNG imports is set to deepen over the coming years, as declining production and waning pipeline gas supplies from Myanmar prove increasingly unable to meet rising demand.
Vietnam - The scheduled commissioning of PetroVietnam's (PVN) Son My (4.9bcm) LNG terminal in 2020 will allow Vietnam to start accepting LNG imports for the first time, offsetting the long-term reduction in domestic gas output as a result of natural declines. Construction of the smaller Thi Vai (1.3bcm) project is put on hold, as PVN reviews the economic feasibility of the USD286.0mn venture.
The emergence of big Southeast Asian market should prove a welcome development for LNG exporters in the region, such as Malaysia, Papua New Guinea (PNG) and Australia (countries that are well-positioned geographically and have spare capacity available to support additional exports) that are bracing for intensifying competition in the North Asian LNG markets due to an upsurge in US supplies. While we continue to expect Japan, China, South Korea and India to comfortably remain the largest LNG consumers in the Asia-Pacific region for the foreseeable future, the abovementioned project pipeline and the consequential pick-up in LNG demand will see Southeast Asia's share of total net LNG imports in Asia increase from 3.7% in 2016 to 7.8% by 2020.
Column 1
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Southeast Asia LNG Share To Expand
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Asia - % Share Of LNG Imports, 2016 vs 2020
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Source: BMI Research
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