Top Executive paints bright outlook on Asia LNG: Report

Demand for liquefied natural gas (LNG) in Asia should double to more than 150 million tons by 2015 on surging demand in Japan, South Korea, China, India and Taiwan a leading industry executive said Tuesday, as reported by AFP.

The president and chief executive of Australian resources giant BHP Billiton Ltd, Philip Aiken, said rising demand was expected to result in ?fiercer competition? on the supply side, which will in turn lead to lower prices and margins.

?Demand is continuing to grow in the main markets of Japan, Korea and Taiwan, while China and India are emerging as major consumer,? Aiken told an oil and gas conference in Singapore.

LNG has been growing in popularity worldwide with its usage expanding from home cooking to commercial and industrial customers, natural gas, which is cleaner than crude oil, is also being developed power vehicles and is generally seen as a cleaner fuel to coal or oil.

China?s LNG needs should double from 10 million tons in 2001 to 20 million tons annually by 2005, with Indian demand rising from five million tons to 12.5 million tons, Aiken said.

Japan, the world' s second biggest economy, will remain the region main LNG importer the region?s main importer, taking some 72.9 million tons in 2015 compared with 55.2 million tons in 2001.

The United States, which imported only about 5.2 million metric tons of LNG in 2002, along with South America are also expected to emerge as major buyers, Aiken said.

In 2002, Indonesia was Asia?s biggest supplier of natural gas, accounting for about a quarter of the region's output, followed by Malaysia, Qatar and Australia.

Australia, where prospects of finding major oil reserves are bleak, is expected to ramp up exploration and production of natural gas to increase its share of the Asian market.

"Taking these (developments) ?into account, Asian demand could be in excess of 150 million tons of 150 million tons of LNG by 2015, compared to about 75 million tons in 2001, Aiken said.

The main driver is the region's economic growth, which economists say will continue to outpace the rest of the world over the next several years.

In addition, the electricity and gas grids in many Asian countries are expanding as governments in the region deregulate and privatize their oil and gas sectors and seek to guarantee long-term energy supplies.

Transporting natural gas to destinations in Southeast Asia will become after a web of pipelines is completed while will costs to Northeast Asia should also decline as larger tankers are rolled out.

Aiken said the cost of producing LNG, which has already fallen in recent years, will drop further.

?There will be fierce competition to supply the growing market of Asia. Japan will continue to be a key market along with China and Korea. China will be the real place (of) growing demand?. This (competition) will have the effect of lowering prices and margins.? (*)