The Fukushima earthquake tsunami disaster of March 2011 did not just shut down Japan’s mighty nuclear power industry, it has accelerated trends already underway that will reshape the global energy markets for decades to come.
The natural gas industry, on course for a bigger share of the global energy mix before the disaster, is predicted to grow even faster. ExxonMobil predicts natural gas will be the world’s fastest growing energy source, supplying 27% of global energy demand by 2040 compared with 22% in 2010. Despite the ongoing recession in the US and Europe, oil prices have found powerful base support at approximately US$ 100 - US$ 110/bbl while coal, for all the chest beating about climate change, is making a comeback after appearing to be on the wane. With the continued failure to contain Fukushima’s radiation, nuclear energy’s role is looking increasingly muted to the benefit of the three main fossil fuels.
Japan and India
While elevated Asian demand for natural gas has become an article of faith, the region’s consumers are starting to question why they are paying outrageously high prices compared with what producers are charging Americans and Europeans. Asia’s second and third largest consuming countries have launched a regional campaign to try and break the oil linked system for pricing LNG to one tied to Henry Hub. But Japan and India are fighting the near five decade old pricing system from positions of weakness.
Indonesia as an LNG importer
With the December signing of its first purchase agreement, the world’s third largest LNG exporter has begun its transition to become a net importer expected sometime next decade.
As it struggles to meet Indonesia’s rising energy demand, state energy firm Pertamina will begin importing 800 000 t of LNG a year from US based Cheniere Energy for 20 years from 2018, the two companies announced in early December.
Indonesia’s energy demand is growing at a faster pace than its domestic output of oil, gas and coal, all of which are being rapidly depleted after decades of production.
Malaysia looking to Australia and Canada
With its domestic energy self sufficiency expected to end later this decade, Malaysia is betting heavily on finding and developing natural gas reserves in Australia and Canada.
In announcing plans for a US$ 35 billion LNG project in western Canada, state firm Petronas is undertaking its biggest and most ambitious project in its 39 year history. It is making a bold move into the risky unconventional gas terrain with no previous exposure to North America. In Australia, it owns a 27.5% stake in a consortium that has been struggling against rising cost and environmental opposition since 2007 to develop LNG from coalbed methane gas.
Gazprom in race against Novatek
China National Petroleum Corp (CNPC) is on course to tap Russia’s enormous natural gas reserves after securing two major deals in September made possible in large part by the growing rivalry between Gazprom and Novatek to supply the Chinese market.
Papua New Guinea LNG on course
Papua New Guinea (PNG) is set to become the world’s latest LNG producer and exporter with operator ExxonMobil affirming its plan to complete and start up a US$ 19 billion plant near Port Moresby in the second half of 2014. Operator Esso Highlands Limited (EHL) said the jointly owned PNG LNG project is more than 90% complete with construction now within budget after it was heftily revised last year from the previous estimate of US$ 15.7 billion.
Singapore advances on plan to develop LNG
Singapore has reported making progress in its quest to develop LNG into a shipping fuel following the completion of a study to establish technical standards and procedures for the nascent industry.
The Maritime and Port Authority (MPA) said it and its technical consultant, Lloyd’s Register of the UK, is inviting stakeholders to comment on the study that is aimed at making Singapore into Asia’s first major LNG bunker fuel port.
Supplying natural gas produced from coal
China will start up the first of four proposed giant plants to convert coal into natural gas by the end of 2013, less than a decade after the government began planning for ‘cleaner’ ways to use the nation’s vast coal reserves.
The full article can be found in the February issue of Hydrocarbon Engineering.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/28012014/exxonmobilgas_in_asia_weng116/