PH touted as future LNG market in Asia
WASHINGTON, DC – The Philippines is now surfacing on the radar of the global gas industry as among the markets in Asia that will soon join the league of liquefied natural gas (LNG) importers.
At the 2018 World Gas Conference, Leslie PaltiGuzman, president of consultancy firm Gas Vista noted that in the diversification of players in the LNG sector, newcomers will mostly feature Southeast Asian markets such as the Philippines, Indonesia, Malaysia and Thailand.
Of the identified markets, it is the Philippines that has yet to concretize investments on planned LNG import facility with targeted 5.0 million metric tons per annum (mtpa) capacity – while Malaysia, Indonesia and Thailand already have their respective LNG import terminals.
By and large, shifting gas supply-demand dynamics had been seen propelled by Asia, with International Energy Agency (IEA) Executive Director Fatih Birol propounding that “change is especially marked in Asia and other emerging markets…we see strong growth in South and Southeast Asia, driven by strong economic growth and efforts to improve air quality.”
Experts cautioned though that for countries still firming up ventures in the LNG sector, the key hurdles that they would have deal with are on supply contracts and regulatory frameworks as well as government policies.
Qatar Petroleum Chief Executive Officer Saad Al-Kaabi in particular has noted that “LNG projects lacking solid, long-term contracts will find it tough to get past final investment decision stage,” adding that investors can certainly not just be able to rely on volatile spot prices.
He stressed “this is a heavily capital intensive business that needs support and financing and a big commitment over a period of five to seven years for each project.”
On the whole though, global players are seeing bright spot for gas onward to the future, primarily anchored on what are deemed as “blue skies” policy of governments; or what are targeted as shift from coal to cleaner gas as energy sector fuel.
“Public policy is a key driver of the LNG industry… policy decisions are needed to support LNG growth in Asia,” Hendrik Gordenker, chairman of Japanese firm JERA Co. Inc., has noted.
Additionally, Adif Zulkifli, senior vice president of Malaysian firm Petroliam Nasional Berhad (Petronas) emphasized that “regulators need to allow for a more open and competitive market in Asia for natural gas and LNG.”
Gas as a fuel, according to International Gas Union (IGU) President David Carroll, is “abundant, flexible and costeffective, and can also address environmental challenges in urban domains.”
It was acknowledged though that predicaments and barriers still remain, hence, “it is crucial that governments, policymakers and stakeholders from across the value chain have frank and honest conversations, with regard to how we move forward and that an environment is created that allows gas to flourish as a core part of the future sustainable energy mix.”