Shale gas could have major impact on Asian LNG market

Posted on 14 October 2013

Participants from the US, Australia, Indonesia and Japan discussed the Asian LNG market with moderator Tatiana Mitrova, Head of the Oil and Gas Department at the Energy Research Institute of the Russian Academy of Sciences.

“In the last couple of years there were some shifts on the demand side,” she said in her opening statement. “First of all, the Fukushima catastrophe has pushed up energy demand in Japan, at the same time with environmental concerns and demand growth in China and Southeast Asia.”

The US potentially has a 100 year supply of natural gas, transforming the nation from an import consumer to a supplier, said Executive Vice President at ConocoPhillips, Don Wallette. As demand for LNG increases in Asia, North America is becoming another source for the Asian LNG market. Countries such as China, which has estimated shale reserves of 1,115 trillion cubic feet, are looking for ways to mimic the success of the US.

Discussants debated views on whether current developments in the gas sector constitute a “revolution” or are simply a part of the market’s natural “evolution,” and whether industry actors would focus on short-term projects or long-term planning.

Richard Guerrant, ExxonMobil’s Global Vice President for LNG, noted that the panelists were are all optimistic about LNG prospects in the long-term. But, he added that “We need to ensure we can control costs, and provide an affordable product,” including a pricing formula that ensures long-term stability.

This news story is based on the Regional Crossroads session, “New dynamics of Asian LNG markets?”,  at the 2013 World Energy Congress.