By 2025, southeast Asia’s LNG demand is expected to reach 25 mta, underpinned by rising energy demand and falling domestic gas production
Booming economies, growing populations and increasing gas-fired power requirements will more than double the demand for LNG in southeast Asia to 25 mta by 2025. Underpinning this demand will be Vietnam and the Philippines, which will become first-time importers of LNG as their own domestic gas production falls over the next decade.
Construction has begun on new LNG receiving terminal in southern Vietnam, which will make the country the newest southeast Asian nation to import LNG.
State-run oil company PetroVietnam and its gas arm PV Gas broke ground for the Thi Vai LNG terminal in southern Vietnam in late October. With an initial investment of US$285M, the terminal will have a capacity of 1 mta of LNG when the first phase of development is completed in Q3 2022. A second phase, due for completion in 2023, will increase capacity to 3 mta of LNG.
PetroVietnam says the terminal will supplement the supply of about 1.4 billion m3 of gas to industrial and power-plant consumers, partially offsetting a shortage of gas in the country after 2022.
A second LNG receiving facility in development, Son My terminal, received approval from the Vietnam Government in August. US-based AES Corp is developing the new terminal along with a 2.2 GW combined cycle gas turbine (CCGT) power plant, which will be located in the south-central province of Binh Thuan. Set to begin commercial operations in 2024, the Son My 2 plant will operate under a 20-year contract with the government.
PetroVietnam says the Thi Vai and Son My LNG receiving terminals will have an aggregate capacity of 10 mta of LNG – enough to meet southern Vietnam’s gas needs.
Floating storage and regasification unit (FSRU) technology will feature prominently in the Philippines’ plans to begin importing LNG by 2021.
In September, US-based Excelerate Energy received the notice to proceed from the Philippine Department of Energy to develop a floating LNG import terminal in the Bay of Batangas. The Luzon LNG project will supply natural gas, sourced from LNG, to existing and new gas-fired power plants that provide electricity to Luzon and Manila. LNG will augment the existing gas production from the Malampaya fields, as reserves begin to deplete over the next decade.
Excelerate will develop, design, permit, construct, finance and operate the Luzon LNG terminal, with commissioning in Q3 2021.
Last year southeast Asian countries Thailand, Singapore, Indonesia and Malaysia imported 11.4M tonnes of LNG, with slightly more than 60% being supplied to Australia, Qatar and Indonesia. Overall, Australia, Brunei, Indonesia, Malaysia and Papua New Guinea exported 123.01M tonnes of LNG, accounting for 39.1% of world production.
A fraction of Singapore’s LNG was supplied by Papua New Guinea’s PNG LNG, which has the capacity to produce 8.3 mta. Since its commissioning in 2014, PNG LNG has had contracts in place with Sinopec, Osaka Gas Co Ltd, Tokyo Electric Power Co and CPC Corp.
Developed at a cost of US$19Bn, PNG LNG is operated by ExxonMobil, with a 33.2% interest, and owned with partners Oil Search Limited (29%), Kumul Petroleum Holdings Ltd (16.8%), Santos Ltd (13.5%) , JX Nippon Oil & Gas Exploration (4.7%) and state-owned Mineral Resources Development Co Ltd (2.8%).
Oil Search is proposing to construction three additional trains at the facility and would support the expansion with gas from the Elk-Antelope and P’nyang fields and double the facility’s nameplate capacity.
Backfill projects abound
A number of larger, high-profile backfill projects should also boost LNG production from Australia, the world’s largest producer of LNG.
Maritime Strategies International (MSI) associate director offshore Greg Brown tells LNG World Shipping that such projects are appealing as they pose less financial risk than greenfield developments.
“Projects such as the Burrup Hub – which includes the Browse tieback to Karratha, and the Scarborough tieback to Pluto – are large-scale developments, and are joined by projects like Shell’s Crux tieback to Prelude FLNG,” says Mr Brown.
In June the Caldita Barossa project entered into exclusive negotiations to supply backfill gas to Darwin LNG, meaning that the Eni-led Evans Shoal project would either be delayed, or have to find a new home.
Woodside’s Scarborough development will eventually provide backfill to Pluto, and Jansz-Io forms part of Gorgon Phase 2, which is backfill for Barrow Island. Prelude FLNG, which only shipped its first LNG cargo in June, will also handle production from the Crux tieback.
Browse, which at one point was set to include three Prelude-sized FLNG vessels, is now being developed as backfill, with two FPSOs likely to send gas back to the North West Shelf plant by 2025. Woodside is targeting an FID for the Browse to the North West Shelf project for H1 2021.
Backfill gas is not a solely Australian theme. Malaysia, which exported 24.66M tonnes of LNG in 2018, has plans for several backfill projects. The Bintulu LNG plant, owned by Petronas, is set to receive new feedstock from the likes of Jerun, Bergading, Kasawari and Lang Lebah field off Sarawak. “These fields are moving through various stages of engineering and concept selection, with Kasawari the most advanced,” says Mr Brown.
“For the supply chain,” says Mr Brown, “these projects represent opportunities to ride the wave of LNG-related investment, without taking on risky LNG liquefaction contracts.”
MSI sees an increasing demand for high-spec pipelay vessels off of Australia “as the likes of Browse, Scarborough and Caldita Barossa all require long-distance tiebacks to their hosts.”
Observes Mr Brown, “One thing that the Australian projects have in common is that they are remote. Scarborough has a 430-km pipeline, Browse is 900 km, and Crux 165 km from the host facility at Prelude. These large pipelines require substantial vessels to install them, and they are in tight supply. Allseas and Saipem perform much of the work, but there could be an opportunity going forward.”