Factors hindering ASEAN´s LNG gas opportunities

The 550 million residents of ASEAN have been tipped as the next major market for Asian LNG demand currently dominated by China, India, Japan, Korea and Taiwan due to their "rising income, growing population and belatedly growing environmental consciousness."

According to Ricardo Barcelona, Managing Director, Barcino Capitas Limited, based on population, "Indonesia, Philippines, Vietnam and Thailand are the large home grown markets. As fuel suppliers - coal, oil and to some extent gas - Indonesia, Malaysia, Brunei and the Philippines comprise this group. While Indonesia, Malaysia and Brunei are established suppliers, Philippine piped gas largely supplies its domestic market."

However, the ASEAN market is hindered from taking-off  by the lack of Regas terminals ("while a number of schemes are under development, none are presently available to take import"); limited local distribution infrastructure ("gas consumption in the Philippines relies on Malampaya and the pipeline that links supplies to about 3,000 MW of power generation capacity"), and transport and retail consumption ("LPG is the principal gas supply, with CNG starting to be introduced in transport").

 He states that, in spite of a number of exemptions to local ownership rules being crafted by the Philippines and Indonesia, limitations on foreign investments and ownership "hinder foreign capital and technology from pursuing these opportunities more aggressively".

Transparency remains an issue in a number of the ASEAN markets "although energy investors appear to face this as a common challenge in countries where reserves are located" and the  ASEAN archipelagic geography "limits the size of contiguous markets."

 However, technology is offering new solutions.