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ASEAN regasification capacity to grow 77% in next decade

Singapore — The Association of Southeast Asian Nations (ASEAN) is likely to add nearly 77% in regasification capacity over the next decade as member countries build LNG import terminals to meet growing energy demand, according to data from the ASEAN Council on Petroleum.

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The growth in Southeast Asia's regasification capacity will be both in terms of onshore facilities and offshore floating storage and regasification units, as countries become increasingly dependant on LNG to offset declines in domestic gas production.

Southeast Asia currently has LNG import capacity of around 36.3 million mt/year, and this is expected to grow to 64.3 million mt/year with the current project pipeline, the data showed.

The main LNG importers currently are Thailand, Singapore, Malaysia and Indonesia, but by the middle of the next decade, Philippines, Myanmar and Vietnam will join the list of LNG importing countries. Thailand's capacity expansion alone will total 14 million mt/year and account for half of the growth in ASEAN's LNG import capacity.

"In the Philippines we project that we will need 43 GW of additional power capacity by 2040," Alfonso Cusi, Philippines' Secretary of Energy, said Tuesday at the Singapore International Energy Conference 2018. He said that in addition to capacity, the country also needs to consider the source of energy and has adopted a technology-neutral policy to support the diversification of the energy mix.

"We are also looking to position the Philippines as an LNG gateway for the region," Cusi said, adding that surging demand for cleaner fuel in Asia has caused it to become a net importer of LNG.

"This places the Philippines at the nexus of LNG shipping routes, such as shale gas from Americas. This means that we will be able to import LNG for our own use and also become an access point for moving LNG to other users in the region," he said.

The Philippines has one major gas source that is running out -- the Malampaya gas field off the coast of Palawan in the West Philippine Sea-and it needs LNG imports to commence before the gas field is fully depleted.

Fatih Birol, executive director of the International Energy Agency, said that with Southeast Asia's LNG imports rising, it will become one of the key global LNG importing regions, similar to how it is one of the most important oil importing regions of the world.

This will however mean Southeast Asia's reliance on the global markets grows exponentially and energy security remains a dominant issue for the region. "The vulnerability of the changes in international energy markets will become more important for the economies of this region," he said.

Birol said Southeast Asia also needs power sector investment of $1.25 trillion up to 2040, which is equivalent to around $50 billion per year on average and twice the current level.

The ten ASEAN member states are Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

--Eric Yep, newsdesk@spglobal.com

--Edited by Jonathan Fox, jonathan.fox@spglobal.com

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