Natural gas as a transition fuel

What is the current energy situation in Asia?

Across Asia, most nations are still heavily reliant on coal and diesel for power generation. While there are variations between jurisdictions, numerous countries – including China, India, Indonesia and Philippines – still use coal for more than 50 per cent of their electricity generation. Many countries have long-term strategies built around renewable energy. But with economies and energy demand across Asia expected to grow significantly over the next decade, there is a need for affordable and reliable transition fuels that allow that demand to be met while progress continues towards achieving emissions reductions targets. Natural gas can be such a transition fuel.

What makes natural gas a good transition fuel?
Modern gas-fired electricity plants produce between 50 and 60 per cent less carbon emissions than their coal-powered equivalents while also being significantly more efficient. Gas also offers an always available lower-carbon source of baseline power production in decades to come to balance intermittency issues that associated with widespread use of renewables.

Why is this transition needed?
Asia has more than half the world’s people and, as populations and economies continue to grow, so too will the associated energy demand. If Asia is unable to meet its emission reduction targets, then the world will miss its timeline to achieve net zero by 2050.

What are some of the challenges of using gas as a transition fuel?
While some countries in Asia produce their own natural gas – notably Indonesia, Malaysia and Thailand – the majority either currently rely or will rely on imports, which poses challenges from both an energy security and infrastructure perspective. Only 9 per cent of the world’s proved gas reserves are in Asia.

The war in Ukraine means global competition for gas supply is more contested than it has ever been. Meanwhile, LNG import terminals usually take several years to complete after a final investment decision is made. ANGEA is here to assist governments and industry with planning of import strategies and infrastructure. Our member companies, which includes some of the world’s most significant gas producers, will be crucial to energy supply and security in the region.

Gas production and its use in electricity generation comes with an emissions profile that can be addressed through innovations like carbon capture, utilisation and storage (see more details below).

How are countries in Asia approaching the transition to gas?
Three countries in Asia – Japan, Korea and China – have the largest LNG import capacity in the world. Japan is particularly advanced with its energy transition plans and aims to have up to eight new gas-powered electricity plants online by 2030. Vietnam has plans to introduce more than 20 new gas-fired plants, while gas is already a well-established part of the energy mix in Thailand and will help underpin the country’s ambitious renewables program. Likewise, Korea has plans to convert nearly half of its coal-fired power stations to gas as it transitions to more renewables.

Around the region, India, China, Indonesia and Malaysia have all forecast greater roles for natural gas. The Philippines, with its rapidly expanding economy, dependence on coal and declining indigenous gas reserves, has long had the potential to be a significant LNG importer.

Transition in action – Singapore
Once powered by oil, Singapore started shifting to gas-powered electricity generation in the early 2000s and hasn’t looked back. Today, 96 per cent of Singapore’s electricity needs are met by natural gas, a situation that is enabling the country to be bold with its efforts to expand renewables capacity (solar) and explore alternative fuels (like hydrogen). Singapore is expected to use gas for electricity for decades to come.

Are there ways gas production can be less carbon-intensive?

ANGEA’s members – like other gas producers around the world – continue to invest in technology and innovation that lowers their carbon footprint. Use of renewables to power gas production operations is one example of this, while there is ongoing work to decrease the carbon profile of LNG shipping (including the use of ammonia as fuel). One of the most exciting growth areas for the gas sector is the rapid advancement of carbon capture, utilisation and storage – a scientific process by which greenhouse gas emissions from the production of natural gas or its use as a fuel are captured and then either placed into permanent storage or used in other forms of industrial processing.

What is ANGEA’s role with natural gas?

ANGEA’s membership consists of the biggest companies throughout the global natural gas and energy supply chain. We work with governments and industries across Asia to ensure there is an affordable and secure supply of low carbon gas, to serve as a critical transition fuel as the region works to achieve its climate targets.

ANGEA is an industry association representing LNG and natural gas producers, energy buyers, suppliers and companies in APAC. Based in Singapore, it works in partnership with governments and societies across the region to deliver reliable and secure energy solutions that achieve national economic, energy security, social and environmental objectives and meet global climate goals.