This week in energy: US approvals concerns, a big Indonesian discovery and more deals for India
Each week, the Asia Natural Gas and Energy Association (ANGEA) compiles stories from the energy world that have caught our eye.
Given the region in which we operate – and our purpose – this collection of content is largely Asia-focussed. But we also look further afield, knowing that developments, trends and technology from around the world also have an impact across our region.
This edition, the first of 2024, captures news from the tail end of 2023, as well as the first few weeks of the New Year.
US approvals pause causes concern in Asia
In a nod to the global nature of energy trade and the importance of US LNG to Asia’s energy systems, perhaps the most noteworthy news development of 2024 to date has taken place on the other side of the Pacific Ocean.
A US Government decision to pause pending decisions on exports of LNG to non-FTA countries and reconsider the criteria under which they will be assessed going forward is of significant concern for many governments in Asia.
Any curtailment of future US LNG exports would have a detrimental impact on energy security in Asia and the ability of nations in our region to reduce their reliance on coal-fired power and transition to gas.
The US Chamber of Commerce penned an excellent opinion piece that sums up the potential impact for both Europe and Asia of changes to the way LNG export projects are assessed and approved.
Read more: https://bit.ly/3HywVXO
Indonesian gas discovery could be among ‘world’s biggest’
Closer to “home”, encouraging news emerged from Indonesia in late December, with the announcement that additional gas reserves discovered in the South Andaman Sea could be among the biggest in the world.
This new discovery by Abu Dhabi-based Mubadala Energy has potential reserves of more than 6 trillion cubic feet of gas and follows a separate October find with reserves of up to 5 trillion cubic feet.
Indonesia has set a domestic target for gas production of 12 billion standard cubic feet per day by 2030 as it looks to shore up its energy security and switch out coal for gas.
Read more: https://bit.ly/48u4sO2
ExxonMobil adds to Mexico Pacific investment
ANGEA member company ExxonMobil will buy another 1.2 million tonnes per annum of LNG over 20 years from Mexico Pacific’s Saguaro Energia plant – in a deal that paves the way for a final investment decision on a third train at the facility.
ExxonMobil, which already has a deal in place to purchase LNG from Saguaro Energia’s first two trains, joins fellow ANGEA member Woodside Energy in agreeing to purchase LNG from train three, should the expansion go ahead.
Saguaro Energia is of particular relevance to Asia due to a west coast location that means LNG shipments do not have to negotiate the Panama Canal.
Read more: https://reut.rs/48yjpPJ
Delighted to formally welcome @ExxonMobil into T3 of Saguaro Energia with our 3rd LNG SPA for an additional 1.2 mtpa. This SPA concludes sales required for T3 FID expected this year https://t.co/t1sPXSYZZh#MexicoPacific #ExxonMobil #LNG #SaguaroEnergia #Mexico #ACloserFuture pic.twitter.com/bUmxZ5uXu8
— Mexico Pacific (@MexicoPacific) January 16, 2024
India continues to seal LNG deals
LNG supply will be critical to India reducing its reliance on coal and achieving a stated aim of having gas make up 15 per cent of its energy mix by 2030.
With this in mind, it’s been pleasing to see two significant supply deals emerge in the past month.
In the first week of 2024, GAIL announced a 10-year deal to buy one million metric tonnes of LNG per year from Vitol (read more: https://bit.ly/3H7FHLZ)
More recently, it was reported that Qatar Energy would extend out to 2050 contracts with India that currently expire in 2028, and that it would do so on cheaper and more flexible terms (read more: https://reut.rs/4bgGnfR).
The ability of Asia’s emerging economies to access long-term LNG supply more flexibly was a key recommendation of last year’s Rystad Energy Study Into Energy Security In Southeast Asia.
ANGEA and Global CCS Institute enter into formal MOU
It was with great excitement in early January that ANGEA announced the signing of a formal memorandum of understanding with the Global CCS Institute.
The Global CCS Institute is a world-renowned organisation with global expertise, dedicated to advancing development and adoption of a technology that will be critical to our region’s efforts to achieve net zero.
Given ANGEA’s focus on carbon capture and storage and with strong synergies and mutual interest in the work being undertaken by the two organisations, it made sense for us to formalise the relationship.
We now look forward to working even more closely with the Global CCS Institute on policy development, advocacy and education for carbon capture and storage (CCS) technology in the Asia Pacific.
Read more: https://bit.ly/3HogQUw
Chevron joins consortium to advance low-carbon energy solutions in Singapore
ANGEA member company Chevron is among seven major companies that have entered into a memorandum of understanding to collaborate on low-carbon technologies that will support Singapore’s pathway to net zero.
The technologies will include integrated and energy-efficient carbon capture, utilisation and storage systems, and hydrogen development.
Read more: https://bit.ly/47Cw4jg
Woodside links with South Korean giant on ‘lower carbon’ hydrogen deal
Australian member company Woodside Energy continues to grow its collaborations with major Asian partners to develop low-carbon energy solutions.
In addition to a pair of partnerships with Japanese companies that will explore carbon capture and storage chains, Woodside has now signed an MOU with SK E&S that will advance studies related to potential hydrogen and ammonia value chains between Australia and South Korea.
Read more: https://bit.ly/48ClSIy
JERA supporting adoption of LNG in the Philippines
Japan’s JERA is a regional leader on energy transition solutions and it’s great to see the ANGEA member company supporting the Philippines in its quest to make gas a larger part of the country’s energy mix.
With the Philippines’ own Malampaya gas field in decline, LNG imports will be integral to expanding gas-fired power as an alternative to generation from coal.
JERA’s will provide support related to demand assessment, environmental impact assessment and the development of national systems, including regulatory frameworks.
Read more: https://bit.ly/3to3hBb
A Canadian take on the US LNG export situation
With Canada set to enter the global LNG export market over the next 18 months, it was interesting to read a view this week from “north of the border” on the decision to pause US export approvals.
Canadian energy industry officials say the highly integrated nature of the North American energy means there would likely be flow-on effects for Canada as well (read more: https://bit.ly/47QvpuK).
In positive news for the Canadian LNG landscape, Shell has signed a 20-year supply deal with Ksi Lisims LNG – which will be one of the country’s first export projects to enter operation.
Canadian LNG is likely to prove attractive to Asian buyers due to its low-carbon nature and ability to be shipped direct from geographically-suited western ports.
Read more: https://reut.rs/3vBjjrN
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.