Petroleum Intelligence Weekly: New Buyers Set to Join Asian LNG Club

“With Asian gas demand outpacing supply, the region is set to increase its share of the global LNG market from its current 60% as new and existing LNG buyers advance plans for import terminals. Asia has five LNG buyers at present — Japan, South Korea, Taiwan, China and India — but that number rises to six this month with the start of commercial operations at Thailand’s first LNG terminal, and could reach 13 by 2020 if other proposed projects in Southeast Asia can overcome regulatory and economic challenges . . . . Consultancy Poten & Partners estimates that LNG could account for 16% of expected Chinese gas supply of 450 billion cubic meters per year by 2020, equivalent to 54 million tons/yr of LNG. But Chinese importers are potentially losing $2.20 per million Btu on newer oil-indexed contracts when crude is at $100 per barrel, according to Poten analyst Stephen Thompson, who says China needs an oil price of $88/bbl or lower to break even on LNG imports. India’s import capacity could more than triple to 47.5 million tons/yr by 2016 if proposed projects go ahead, according to leading importer Petronet, but imports may be constrained by the sensitivity of the key power and fertilizers sectors to high LNG prices.”