Liquefied natural gas (LNG) suppliers are confident that strong gas demand growth in Asia in the coming decades will underpin the development of more projects this decade.
Asia’s LNG demand has been growing by a whopping 21 Mt this year—a strong rebound from last year’s pandemic-driven impact, Gavin Thompson, Vice Chairman, Energy—Asia Pacific, at Wood Mackenzie, wrote on Thursday.
The latest LNG project to get the go-ahead was Woodside’s US$12-billion Scarborough and Pluto Train 2 developments sanctioned at the end of November.
“Scarborough gas processed through Pluto Train 2 will be one of the lowest carbon intensity sources of LNG delivered to customers in north Asia, with first LNG cargo targeted for 2026,” Woodside said.
CEO Meg O’Neill noted that “Scarborough gas processed through the efficient and expanded Pluto LNG facility supports the decarbonisation goals of our customers in Asia.”
Asia will need a lot of natural gas and LNG in the coming decades to reduce emissions from its power generation sector by replacing coal capacity with gas-fired electricity generation.
Scarborough/Pluto 2 in Australia, Baltic LNG in Russia, and Qatar’s massive LNG expansion are the LNG projects that have reached final investment decision this year.
“Indeed, it is confidence in the resilience of long-term Asian gas demand, even in our accelerated energy transition scenarios, that has been key to the 50 mmtpa of new LNG supply that has taken FID in 2021 compared to only 3 mmtpa in 2020,” WoodMac’s Thompson said on Thursday.
Asia’s natural gas demand is set to nearly double by 2050, and it will be the region that will drive gas consumption growth globally, even if Europe begins to shun natural gas at some point in the next decade or two because of environmental concerns about emissions in the gas supply chain and the net-zero ambitions of the UK and the European Union.
With constantly growing natural gas demand, Asia could face gas crunches in the years and decades ahead, too. Local gas production is falling with the exception of China in the near term, Wood Mackenzie said in an analysis last week. The Asian region needs incentives and investments in domestic supply if it is to avert the next gas crisis and cater to its energy security, WoodMac notes.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
- Guyana To Become The 11th Country To Produce Over 1 Million Bpd
- The Electric Vehicle Charging Market Could Be Worth As Much As $1.6 Trillion
- OPEC+ To Add 400,000 Bpd In January Despite Oil Price Plunge