Hong Kong has no domestic energy resources so will have to continue to meet demand for oil and gas through imports alone. Natural gas is the main source of power generation in the country according to BMI and the country is looking to increase the proportion of gas fired electricity to 50% by 2015. Gas consumption is therefore expected to increase from 3.9 billion m3 this year to 4.5 billion m3 in 2018 and 5.5 billion m3 by 2023. China is likely to be able to help temper demand and import levels, however, BMI has said that there is some resistance in Hong Kong to an overreliance on the mainland.
When it comes to refined oil products, demand growth and imports are expected to match GDP trends, according to BMI. A moderate expansion in the sector is anticipated in the coming years as the market in Hong Kong stays mature. However, energy conservation may lead to moderation of levels. Demand is expected to increase however to 438 2000 bpd in 2018 and hit as high a level as 535 950 bpd in 2023, all of which will be imported.
The cost of refined petroleum imports, according to BMI currently stands at US$ 14.1 billion in Hong Kong and this is expected to increase to US$ 16 billion in 2018 and US$ 18.8 billion in 2023. Natural gas imports are anticipated to cost the country US$ 2.06 billion this yea, increasing to US$ 2.65 billion in 2023.
BMI has said that oil and gas demand in Thailand exceeds production to a high level and there isn’t currently any room for the country to become self reliant. Gas consumption is going to be driven by an increase in demand in power generation, industrial and automotive use according to BMI and the attempts to reduce consumption of refining products as the country looks to offset some import need. Therefore, BMI expect consumption of gas to increase from 2013 levels of 41.3 billion m3 to 77 billion m3 in 2023. Gas imports are therefore going to be required and BMI expects these levels to increase from 2013 figures of 9.6 billion m3 in 2013 to 33 billion m3 in 2023.
Looking at LNG, BMI expect the second phase of PTT LNG to double the capacity of the country’s only LNG terminal to 14 billion m3 in 2015. Additional import projects are of course going to be required in the future if the gas market is going to continue to grow, however, if the required infrastructure is not developed in a timely manner, then gas shortages and downside pressure is going to appear in the country.
BMI estimates Thailand to have a refining capacity of 1.21 million bpd and sees the downstream sector in the country coming to a bit of a halt. This is because there is limited oil consumption and there is also increasing uncertainty regarding Thailand’s plans to become a regional fuel oils export hub. BMI do not forecast any expansions in Thailand’s downstream sector.
BMI predict a strong growth in gas production in the country to 2023 as the country continues to grow its gas reserves. The gas potential in the country is also strengthening Turkmenistan’s ties with China and the China-Central Asia Pipeline which is expected to provide China with 40% of its gas imports by 2020.
When it comes to the downstream sector, credit banks in Japan and South Korea have provided the country with US$ 2.5 billion worth of loans to fund construction of the Turkmenbashi petrochemical complex. Japan will fund a US$ 700 million credit agreement, according to BMI, and Korea Eximbank is funding the remaining project. The proposed complex will consist of a gas separation plant, ethylene plant and polypropylene production plant. Looking further in to the petrochemicals sector, Toyo Engineering is going to execute a US$ 800 million project in the west of the country. The complex, when complete will include a gas separation unit, ethylene production unit, and polypropylene production unit. The gas chemical complex will be located in the Balkan Province and is on the cards for 2018 completion.
Looking at exports, BMI has said that due to the country’s dependence on oil prices, there is much volatility in the exports sector. The global oil and gas market has moved away from the cycle of tight supply and global production is now meeting demand. This will put pressure on oil prices and therefore on Turkmenistan’s export revenues.
Edited from report briefings by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/30092014/oil-gas-asia-bmi-pt-2/