The Quarterly Q&A – with ANGEA CEO Paul Everingham – June 2024

In the June 2024 instalment of this quarterly series, Asia Natural Gas and Energy Association CEO Paul Everingham reflects on policy uncertainty around future LNG exports from the US and Australia, positive developments for the global energy landscape and the remainder of 2024 for ANGEA.

How would you describe the first six months of the energy year so far?
From Asia’s perspective, you would have to say that it’s been somewhat frustrating – mainly because of the halt to pending US LNG export approvals. As the International Group of Liquefied Natural Gas Importers (GIIGNL) described it in a recent annual report, there’s a ‘veil of fog’ around future global supply and availability of LNG because of the situation in the US. 

It’s very different to the start of 2023, when US LNG was widely lauded for the contributions it made to energy security in Europe following Russia’s invasion of the Ukraine. There was a lot of positivity then about new projects that would come online to meet not only Europe’s ongoing needs but also support Asia as it transitioned away from coal-fired power. I’m still very optimistic new projects will be developed to do just that – but there needs to be policy certainty for that to happen. That applies to Australia, as well as the US. 

How do you see the US situation, five months on from the announcement of the “pause”?
When I travelled to the US in March, I had the privilege of meeting with a wide range of important energy stakeholders – from both sides of politics and from government and industry. I was very appreciative of the time they gave to hear more about ANGEA and Asia’s energy needs. I think our core message was well understood: that Asia is going to need access to a lot more gas over coming decades if it is going to cut back on coal use and make genuine progress on climate targets. 

In terms of the current halt on export approvals in the US, there have been several indications from the Biden Administration that this will be resolved relatively early in 2024. In between then and now, there is obviously the US election. Whatever happens politically, ANGEA’s focus remains the same. We must continue to make the strong case to stakeholders and decision makers that US LNG is essential to energy security and the energy transition in Asia, and that economic growth in the region will drive significant increases in LNG demand over the next 30 years. As part of that, we need to keep sourcing, generating and highlighting data and other evidence that demonstrates this demand growth. 

How do you view the Australian LNG situation, following the release of the country’s Future Gas Strategy?
I think Asia has been quite receptive of the Future Gas Strategy (FGS) and that it’s also been a welcome development for the Australian gas industry. From a high-level perspective, there’s a lot to like about the FGS – it sets out a pathway for gas production to 2050 and beyond and it acknowledges Asia’s need for LNG. In particular, it recognises that gas demand from Asia may well outstrip many of the projections being put forward from outside the region. 

The challenge with the FGS is that nothing within it is set in stone and many details are still to come. There has been a delay already in reforms to offshore approval processes that will be required to progress many of the strategy’s aims. Australia’s own energy security issues have also become so pressing that there is a potential risk that addressing them could be at the expense of future LNG export volumes. That’s a real worry for Asia. Wherever I travel in the region to meet with stakeholders, one of the first questions I get is “where is our gas going to come from?” 

I’ve been in Australia twice over the past two months, firstly for the Australian Energy Producers conference and then a United States Studies Centre conference on economic security. The importance of Australian LNG to the current and future energy systems of Asia was something we reinforced in engagements with key stakeholders, including state and federal governments. 

Paul Everingham speaks at the US Studies Centre event in Sydney.

What does this policy uncertainty mean for Asia?
There are a couple of ways to look at that question. One is that if some key LNG export projects are delayed or don’t proceed – and there is already evidence of some delays in the US – then there will inevitably be impacts at the receiving end in Asia. Lack of policy certainty equals lack of investment certainty and LNG import facilities and the infrastructure that accompany them cannot be planned or built quickly. They take many years. Meanwhile, energy decisions being made by key government decision makers in Asia are even more long-term. They are thinking decades in advance when it comes to their energy systems.  If investment in infrastructure doesn’t happen – from either an export or import perspective – the result will be more entrenched coal use for Asia’s emerging economies. 

The other side of this situation, building from the “where is our gas coming from?” question, is the potential alternative sources of supply for Asia if LNG exports from the US or Australia were to be restricted or reduced. We’ve just seen the EU step up its sanctions around Russian gas supply, with a particular focus on LNG. As Europe becomes out of reach, it’s inevitable that Russia would look more to Asia as a destination for its gas and that countries seeking to move away from coal use would become a target. Russia cannot be allowed to gain that foothold and policy settings for LNG exports in the US and Australia must guard against that. Both countries have sufficient gas resources to meet domestic needs and demand from Asia over many decades. Ensuring this happens will help keep Russia out of the picture. 

We’ve talked a lot about uncertainty so far. What are the things you’re excited or optimistic about on the global energy landscape?
The policy uncertainty is concerning but there’s actually been quite a lot of encouraging news on the LNG front. The GIIGNL report I referenced earlier had a great deal of information that illustrates how essential LNG imports are to the energy systems of Asia. Growth in global LNG trade in 2023 was driven by Asia, which was also responsible for 65% of all LNG demand. Three of the four new LNG-importing jurisdictions for 2023 were Asian – Vietnam, the Philippines and Hong Kong. Nine LNG import terminals came online in Asia in 2023 and as many as another eight could become operational before the end of 2024. All of this points towards a region that will be using gas for a very long time, particularly as countries like Vietnam and the Philippines mature and evolve as importers and accelerate the move away from coal. 

Another exciting thing is the momentum building for cross-border carbon capture and storage (CCS) in Asia Pacific. CCS might not be featuring in as many headlines as it was this time last year but there is plenty going on behind the scenes in the region. ANGEA’s Carbon Certification for Cross-Border CCS Study is at the heart of that, and we’ve had some extremely productive and positive discussions with stakeholders from government, industry, think tanks and multilateral banks. We are very much looking forward to being able to publicly unveil a whole-of-region framework in coming months that will inform the development of bilateral and – hopefully at some point – multilateral cross-border CCS agreements in Asia Pacific.  

What else does 2024 hold in store for ANGEA?
It’s definitely going to be a busy run to the end of the year for the ANGEA team. One of our major engagements will be Gastech in Houston in September. It’s always a quality event and we’ll take the time while we are in the US to continue to engage with policy and decision makers around the US LNG situation. In the lead-up to September we’ve got events in Melbourne, Bangkok, Jakarta and Kuala Lumpur. And then later in the year we’ll be in Japan for the LNG Producer Consumer Conference and the GIIGNL General Assembly. 

Policy-wise, I just touched on the Cross-Border CCS Study. That’s going to continue to pick up pace through the rest of the year. We also have ongoing policy projects focused on decarbonisation of the LNG supply chain and power market modelling in Asia and we look forward to providing updates on them in due course. 

Paul Everingham is the inaugural CEO of the Asia Natural Gas and Energy Association (ANGEA), which works with governments, society and industry throughout Asia to build effective and integrated energy policies that meet each country’s climate objectives.