15 july 2015. perspective on gas market integration asean gas market situation | 1 ascope...

Conference on APEC Regional LNG Trade Facilitation15 – 17 July 2015, Taipei, Chinese Taipei

“ASEAN Gas Market situation and Perspective on Gas Market Integration”By

Mr. Paramate Hoisungwan

15 July 2015

Agenda

1

Perspective on Gas Market Integration2

ASEAN Gas Market situation

| 2

0 ASCOPE Introduction

Agenda

1



| 3


ASCOPE Introduction

| 4

The ASEAN Council on Petroleum (ASCOPE) is an ASEAN Specialised Energy Body, representing by their National Oil Companies.

ASCOPE was originally proposed by Pertamina, and established in 1975, executed by the five founding ASEAN member states, Indonesia, Malaysia, Philippines, Singapore and Thailand.

Main objective: is to support member countries increase their capabilities, through mutual assistance, in all aspects and phases of the petroleum industry.

The ASCOPE Secretariat has been hosted by PTT since 27 November 2014.

Agenda

1



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1. ASEAN Gas Market situation Why ASEAN?

| 6Source : (1)Institute of ASEAN Studies (ISEAS), (2) ASEAN, IMF, (3)IEA-The Asian Quest for LNG in a Globalising

Market ,

ASEAN Economic Community (AEC) (1)ASEAN will announce the attainment of AEC on 31st December 2015 to have an integrated production space with free movement of goods, services, and skilled labour.

ASEAN GDP (2)ASEAN GDP in year 2013 was 2.4 Trillion USD which increased dramatically from 1.5 Trillion USD in Year 2009. GDP growth rate is expected to be around 4.6%

ASEAN Energy Demand (3)“ASEAN’s energy demand is foreseen to increase by over 80% between 2011 and 2035. Gas demand in particular will increase from 150 bcm to 250 bcm by 2035”


| 7Source : Institute of ASEAN Studies (ISEAS), US-ASEAN Business Council, East-

West Center

• ASEAN’s geostrategic importance stems from many factors, including

• the strategic location of member countries

• the large shares of global trade that pass through regional waters

• ASEAN is at the center of a dynamic Asia-Pacific region.

Japan$5t

China$8.9t

India$1.8t

AUS$1.5t

ASEAN

$2.4t

$1.2t

$485b


| 8Source : Institute of ASEAN Studies (ISEAS), US-ASEAN Business Council, East-

West Center


| 9Source : 2012 World Bank Data

ASEAN700,000 M

(2030)

ASEAN600,000 M

1. ASEAN Gas Market situation Gas consumption increasing while gas production declining after 2020

| 10Source : WoodMackenzie

1. ASEAN Gas Market situation ASEAN Gas Reserves (Tcf), Production and Consumption (MMSCFD)

| 11Source : (1) EIA Natural gas production and consumption in ASEAN countries

(as of end 2012) (2) EIA, 2014

MyanmarNet

ExportReserves

10

SingaporeNet

ImportReserves

N.A.

ThailandNet

ImportReserves

9.04Malaysia

Net Export

Reserves83

IndonesiaNet Export

Reserves104.7

VietnamSelf

ProducerReserves

24.7

BruneiNet Export

Reserves13.8

LaosNo production

No consumption

ReservesN.A.

CambodiaNo production

No consumption

ReservesN.A.

PhilippinesSelf

ProducerReserves

3.5

Total ASEANProduction = 20,357 (1)

Consumption = 14,187 (1)

Net Export= 6,170 (1)

Reserves = 249 (2)

1. ASEAN Gas Market situation Need infrastructure to support energy deficit countries

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Energy Deficit

Energy Surplus

North ASEAN

South ASEAN

1. ASEAN Gas Market situation ASEAN Diversification

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Thailand

Heavily rely on gas for power producing.Need to import more gas/LNG.

Cambodia

Currently, no gas demand.Potential gas production from OCA.

Singapore

Depend on gas/LNG import.Possibility to be gas hub.

Indonesia

Hugh natural gas reserves.Major LNG exporter.Domestic obligation

Myanmar

Low access to domestic gas supply. Most of gas exported.

Lao PDR

Currently, no gas demand.

Vietnam

Gas demand increasing.Plan to import LNG

Philippines

Domestic production declining.Plan to import LNG.

Malaysia

World 2nd largest LNG exporter but the domestic production is maturing.

Brunei

Exporter of LNG since 1972.

ASEAN requires gas market integration

Agenda

1



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2. Perspective on Gas Market Integration

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Foundation for ASEAN Gas Market Integration

Infrastructure

Regulation

GasPrice

GasQuality

Trading hub/

ASEAN LNG

Gas Market Integration


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Foundation for ASEAN Gas Market Integration: Infrastructure

One of major infrastructure project conceived as part of the ASEAN Vision 2020 is the Trans-ASEAN Gas Pipeline (TAGP).

The TAGP project aims to interconnect existing and planned gas pipeline infrastructure of ASEAN Member States, to transport gas across borders to ensure greater security of gas supply.

The TAGP Memorandum of Understanding (MoU) , which originally entered into force on 21 May 2004 for the period of 10 (ten) years was extended for another 10 years, i.e., 2014-2024.

A total of 13 bilateral gas pipeline interconnection projects connecting 6 countries bilaterally and with a total length of approximately 3,673 km.

In addition, LNG initiative introduced to be a compliment to TAGP to include ASEAN gas connectivity via the regasification terminals that can serve as ‘virtual pipelines’.

Currently, there are 4 LNG regasification terminal in ASEAN namely; Map Ta Phut – Thailand (2011), West Java FSRU – Indonesia (2012), SLNG – Singapore (2013) and Sungai Udang – Malaysia (2013).

New TAGP Map 2015

| 17Source : ASCOPE

13 Pipelines-3,673 km4 Regas Teminals


| 18

Foundation for ASEAN Gas Market Integration: Regulation

Different law and Regulation in ASEAN countries.

ASEAN Economic Community is expected to be established by 31 Dec 15. However, the gas market will not fully opened market.

Concerns on gas market access, tariff/taxation, transit rights for infrastructure.

Currently, only Thailand has Third Party Access for natural gas system.

Requires harmonization of law and regulation.


| 19Source : ASCOPE

Foundation for ASEAN Gas Market Integration: Gas price

Indonesia Singapore Thailand Vietnam0

2

4

6

8

10

12

14

16

18

PowerIndustry

7 7

16 16

14

1211

9

12

14

4

6

10

13

USD/MMBTU

Country

Different price structure/policy


| 20Source : ASCOPE

Foundation for ASEAN Gas Market Integration: Gas Quality

1,100

1,200

1,300

1,400

1,500

1,600

WI

1,143

1,367

1,396

1,213

1,357

1,436

1,260

1,400

Analytical on LNG specification

Malaysia Thailand VietnamSingapore

Requires quality

adjustment


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New initiatives to create gas market integration: LNG Hub/ASEAN as LNG destination

LNG can serves as “virtual pipeline”

LNG Hub– Increase LNG supply security in the

region– Share infrastructure– Break bulk for small demand

countries

ASEAN as LNG destination– ASEAN Buyers can form a

consortium to do a joint LNG procurement.

– Increase negotiation power – Increase Buyers’ flexibility to adjust

quantity among joint procurement members

LNG LNG


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Challenge of ASEAN gas market integration

Financial:- Huge investment

Technical:- Compatibility

Market Access:- Third Party Access

- Harmonization

Policy:- Subsidy

Diversity:- Diverse countries

in ASEAN


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Possibility and Opportunity

ASEAN Gas Market Integration

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Thank you.

Contact : Mr. Paramate HoisungwanEmail : [email protected]

15 july 2015. perspective on gas market integration asean gas market situation | 1 ascope...

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