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    ASEAN region set to become net gas importer by 2025 [Gas in Transition]


Declining indigenous supply will pose added energy security concerns for the region, according to the ASEAN Centre for Energy. [Gas in Transition, Volume 3, Issue 8]

by: Gary Lakes

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Natural Gas & LNG News, Asia/Oceania, Insights, Premium, Gas In Transition Articles, Vol 3, Issue 8

ASEAN region set to become net gas importer by 2025 [Gas in Transition]

Numerous issues came to the fore during the recent East Asia Summit (EAS) – key among them, energy cooperation and transitioning to a net zero economy. In an ending speech at the summit, its chairman, Indian foreign minister Retno Marsudi took note of the need to mitigate the impact of climate change while ensuring energy security and resiliency in East Asia. EAS attendees also committed to take concrete action to facilitate energy transition financing, as well as technology transfers on voluntary and mutually agreed terms. And they endorsed joint deployment, capacity building and human resource development. Enhancing energy cooperation through the Asia Zero Emissions Community initiative was emphasised as a means for countries in the region to build toward net zero emissions and carbon neutrality.

The future gas supply situation for members of the Association of Southeast Asian Nations (ASEAN) – Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and Vietnam – has recently been assessed by the ASEAN Centre for Energy (ACE), which in a report said the region would become a collective net importer of natural gas within as little as three years.

“ASEAN is projected to become a net importer of natural gas by 2025,” Nuki Agya Utama, executive director of ACE, said recently during a press conference in Jakarta, the organisation’s headquarters. This is a shame, he added, noting that member states like Indonesia and Myanmar had abundant resources of natural gas that could supply the region. ASEAN members have seen a considerable lack of new production and processing infrastructure, he said, adding also that the region continues to rely on fossil fuels.

ASEAN countries have taken steps to supply gas to each other through an existing natural gas pipeline system that was initiated through a 2002 memorandum of understanding creating what is known as the Trans-ASEAN Gas Pipeline (TAGP) project. Since the MoU, some 3,600 km of pipeline have been laid between members as bilateral projects. Work is underway to expand the pipeline, Nuki said, and intra-ASEAN cooperation needs to expand too, he added.

Nuki’s comments followed the release in July of ACE’s 2023 Oil and Gas Update, which assesses the energy status and activities of ASEAN.

Gas, oil output decline

In the new update, ACE reported that in 2022, gas reserves among ASEAN member states fell by 5% from the 2021 total to 3.98 trillion m3. For its part, Malaysia maintained stable reserves in 2021 and 2022 at 1.18 trilling m3, while Myanmar saw a slight increase of 1.6%. Indonesia saw its gas reserves decline by 14.4% and Brunei’s fell from 0.26 to 0.25 trillion m3.

ASEAN’s combined crude oil reserves amounted to 11.83bn barrels, a decline of 1.3%, ACE said, noting that the only significant oil reserve increase came from Indonesia with 2022 reserves registering a 6% rise. None of the main ASEAN oil producers experienced an output increase, and actually saw oil production fall by a combined total of 85.15mn b/d during 2022.

Gas production for the region declined in the 2021-2022 period by 12.4bn m3 to total 191.9bn m3 in 2022. According to the report, the major declines in gas production came from Thailand and Myanmar by 17% and 14% to 27.4 and 14.5bn m3 respectively.

“The production decline for both oil and gas were mainly caused by matured and depleted massive oil and gas fields where advanced production methods such as workover and enhanced oil recovery (EOR) techniques are required to lift up the production,” ACE said. While oil and gas prices rebounded in 2022 amid the post-COVID-19 recovery, and provided companies with substantial income, “the challenges faced in maximising production and extending the lifespan of mature oil and gas fields remained a persistent concern,” the think-tank said.

It added that higher gas prices in 2022 did not result in an increase in gas exports from ASEAN due to the need to maintain a balance with domestic demand.

However, ASEAN continued as a net exporter of natural gas with total exports amounting to 51mn tonnes, 80% of which went to countries outside the region. Malaysia and Indonesia remained as the main ASEAN gas exporters with most of their gas going as LNG to China and Japan. Singapore and Thailand were the largest gas importers with most of their supplies coming from intra-ASEAN trading.

Meanwhile, Australia is the largest foreign gas supplier to ASEAN, delivering 46% of imported LNG, much of which goes to Singapore. Singapore and Thailand receive natural gas by pipeline from Indonesia and Myanmar. Thailand’s LNG imports come mainly from outside the ASEAN region, ACE reported. During 2022, new LNG regasification terminals became operational in Thailand and Indonesia with capacities of 7.5mn tonnes/year and 2.25mn t/yr respectively.

Based on its data and trends, ACE said ASEAN would come to rely on gas, and oil, imports in the years ahead and that gas imports would exceed those of exports by 2025. On oil, ACE noted that ASEAN has been a net oil importer since 2005 and forecast that oil imports would increase by seven times by 2050 from the 2020 level.

Member states sign up for energy transition

The report also took note of the number of joint activities that ASEAN members were involved in to address climate and energy issues.

The ASEAN Energy Sector (AES) Methane Leadership Programme (AES MLP) was launched this year with the intention to see the regional energy sector contribute towards the methane emission reduction targets. Members have also taken the Global Methane Pledge which requires countries to work for global methane emissions falling by 30% by 2030. ASEAN members are also participating in the South East Asia CCS Accelerator (SEACA), which is an initiative led by the Global CCS Institute to quicken investment in carbon capture and storage (CCS) technologies throughout the region.

Brunei, Singapore, Indonesia, Malaysia and Thailand have already begun CCS studies or projects. Indonesia’s Pertamina has started the implementation of CCS technology by conducting a CO2 injection project at Pertamina EP Jatibarang, and Malaysia’s Petronas has made a final investment decision to develop a CCS project offshore Sarawak. Furthermore, Petronas, Pertamina and PTT Thailand have boosted their collaboration on methane emissions management.

Numerous companies operating within member states have also signed agreements with regional or foreign firms in which they will undertake studies and actions designed to develop green hydrogen projects.

According to ACE’s baseline scenario, coal will in 2050 continue to supply a huge amount of the region’s basic energy needs, but oil will provide 43% of energy supply. Gas will amount to 23% in 2050, with renewables making up the balance.

The baseline scenario shows ASEAN continuing to rely on coal and oil for more than 60% of its energy needs in 2050, suggesting that a lot of CCS will need to be in place by then. Otherwise, major investments in renewables and alternatives will have to materialise over the next 30 years if the region is to live up to its climate commitments.