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Conference on APEC Regional LNG Trade Facilitation15 – 17 July 2015, Taipei, Chinese Taipei
“ASEAN Gas Market situation and Perspective on Gas Market Integration”By
Mr. Paramate Hoisungwan
15 July 2015
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Agenda
1
Perspective on Gas Market Integration2
ASEAN Gas Market situation
| 2
0 ASCOPE Introduction
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Agenda
1
Perspective on Gas Market Integration2
ASEAN Gas Market situation
| 3
0 ASCOPE Introduction
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ASCOPE Introduction
| 4
The ASEAN Council on Petroleum (ASCOPE) is an ASEAN Specialised Energy Body, representing by their National Oil Companies.
ASCOPE was originally proposed by Pertamina, and established in 1975, executed by the five founding ASEAN member states, Indonesia, Malaysia, Philippines, Singapore and Thailand.
Main objective: is to support member countries increase their capabilities, through mutual assistance, in all aspects and phases of the petroleum industry.
The ASCOPE Secretariat has been hosted by PTT since 27 November 2014.
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Agenda
1
Perspective on Gas Market Integration2
ASEAN Gas Market situation
| 5
0 ASCOPE Introduction
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1. ASEAN Gas Market situation Why ASEAN?
| 6Source : (1)Institute of ASEAN Studies (ISEAS), (2) ASEAN, IMF, (3)IEA-The Asian Quest for LNG in a Globalising
Market ,
ASEAN Economic Community (AEC) (1)ASEAN will announce the attainment of AEC on 31st December 2015 to have an integrated production space with free movement of goods, services, and skilled labour.
ASEAN GDP (2)ASEAN GDP in year 2013 was 2.4 Trillion USD which increased dramatically from 1.5 Trillion USD in Year 2009. GDP growth rate is expected to be around 4.6%
ASEAN Energy Demand (3)“ASEAN’s energy demand is foreseen to increase by over 80% between 2011 and 2035. Gas demand in particular will increase from 150 bcm to 250 bcm by 2035”
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1. ASEAN Gas Market situation Why ASEAN?
| 7Source : Institute of ASEAN Studies (ISEAS), US-ASEAN Business Council, East-
West Center
• ASEAN’s geostrategic importance stems from many factors, including
• the strategic location of member countries
• the large shares of global trade that pass through regional waters
• ASEAN is at the center of a dynamic Asia-Pacific region.
Japan$5t
China$8.9t
India$1.8t
AUS$1.5t
ASEAN
$2.4t
$1.2t
$485b
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1. ASEAN Gas Market situation Why ASEAN?
| 8Source : Institute of ASEAN Studies (ISEAS), US-ASEAN Business Council, East-
West Center
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1. ASEAN Gas Market situation Why ASEAN?
| 9Source : 2012 World Bank Data
ASEAN700,000 M
(2030)
ASEAN600,000 M
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1. ASEAN Gas Market situation Gas consumption increasing while gas production declining after 2020
| 10Source : WoodMackenzie
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1. ASEAN Gas Market situation ASEAN Gas Reserves (Tcf), Production and Consumption (MMSCFD)
| 11Source : (1) EIA Natural gas production and consumption in ASEAN countries
(as of end 2012) (2) EIA, 2014
MyanmarNet
ExportReserves
10
SingaporeNet
ImportReserves
N.A.
ThailandNet
ImportReserves
9.04Malaysia
Net Export
Reserves83
IndonesiaNet Export
Reserves104.7
VietnamSelf
ProducerReserves
24.7
BruneiNet Export
Reserves13.8
LaosNo production
No consumption
ReservesN.A.
CambodiaNo production
No consumption
ReservesN.A.
PhilippinesSelf
ProducerReserves
3.5
Total ASEANProduction = 20,357 (1)
Consumption = 14,187 (1)
Net Export= 6,170 (1)
Reserves = 249 (2)
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1. ASEAN Gas Market situation Need infrastructure to support energy deficit countries
| 12
Energy Deficit
Energy Surplus
North ASEAN
South ASEAN
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1. ASEAN Gas Market situation ASEAN Diversification
| 13
Thailand
Heavily rely on gas for power producing.Need to import more gas/LNG.
Cambodia
Currently, no gas demand.Potential gas production from OCA.
Singapore
Depend on gas/LNG import.Possibility to be gas hub.
Indonesia
Hugh natural gas reserves.Major LNG exporter.Domestic obligation
Myanmar
Low access to domestic gas supply. Most of gas exported.
Lao PDR
Currently, no gas demand.
Vietnam
Gas demand increasing.Plan to import LNG
Philippines
Domestic production declining.Plan to import LNG.
Malaysia
World 2nd largest LNG exporter but the domestic production is maturing.
Brunei
Exporter of LNG since 1972.
ASEAN requires gas market integration
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Agenda
1
Perspective on Gas Market Integration2
ASEAN Gas Market situation
| 14
0 ASCOPE Introduction
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2. Perspective on Gas Market Integration
| 15
Foundation for ASEAN Gas Market Integration
Infrastructure
Regulation
GasPrice
GasQuality
Trading hub/
ASEAN LNG
Gas Market Integration
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2. Perspective on Gas Market Integration
| 16
Foundation for ASEAN Gas Market Integration: Infrastructure
One of major infrastructure project conceived as part of the ASEAN Vision 2020 is the Trans-ASEAN Gas Pipeline (TAGP).
The TAGP project aims to interconnect existing and planned gas pipeline infrastructure of ASEAN Member States, to transport gas across borders to ensure greater security of gas supply.
The TAGP Memorandum of Understanding (MoU) , which originally entered into force on 21 May 2004 for the period of 10 (ten) years was extended for another 10 years, i.e., 2014-2024.
A total of 13 bilateral gas pipeline interconnection projects connecting 6 countries bilaterally and with a total length of approximately 3,673 km.
In addition, LNG initiative introduced to be a compliment to TAGP to include ASEAN gas connectivity via the regasification terminals that can serve as ‘virtual pipelines’.
Currently, there are 4 LNG regasification terminal in ASEAN namely; Map Ta Phut – Thailand (2011), West Java FSRU – Indonesia (2012), SLNG – Singapore (2013) and Sungai Udang – Malaysia (2013).
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New TAGP Map 2015
| 17Source : ASCOPE
13 Pipelines-3,673 km4 Regas Teminals
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2. Perspective on Gas Market Integration
| 18
Foundation for ASEAN Gas Market Integration: Regulation
Different law and Regulation in ASEAN countries.
ASEAN Economic Community is expected to be established by 31 Dec 15. However, the gas market will not fully opened market.
Concerns on gas market access, tariff/taxation, transit rights for infrastructure.
Currently, only Thailand has Third Party Access for natural gas system.
Requires harmonization of law and regulation.
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2. Perspective on Gas Market Integration
| 19Source : ASCOPE
Foundation for ASEAN Gas Market Integration: Gas price
Indonesia Singapore Thailand Vietnam0
2
4
6
8
10
12
14
16
18
PowerIndustry
7 7
16 16
14
1211
9
12
14
4
6
10
13
USD/MMBTU
Country
Different price structure/policy
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2. Perspective on Gas Market Integration
| 20Source : ASCOPE
Foundation for ASEAN Gas Market Integration: Gas Quality
1,100
1,200
1,300
1,400
1,500
1,600
WI
1,143
1,367
1,396
1,213
1,357
1,436
1,260
1,400
Analytical on LNG specification
Malaysia Thailand VietnamSingapore
Requires quality
adjustment
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2. Perspective on Gas Market Integration
| 21
New initiatives to create gas market integration: LNG Hub/ASEAN as LNG destination
LNG can serves as “virtual pipeline”
LNG Hub– Increase LNG supply security in the
region– Share infrastructure– Break bulk for small demand
countries
ASEAN as LNG destination– ASEAN Buyers can form a
consortium to do a joint LNG procurement.
– Increase negotiation power – Increase Buyers’ flexibility to adjust
quantity among joint procurement members
LNG LNG
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2. Perspective on Gas Market Integration
| 22
Challenge of ASEAN gas market integration
Financial:- Huge investment
Technical:- Compatibility
Market Access:- Third Party Access
- Harmonization
Policy:- Subsidy
Diversity:- Diverse countries
in ASEAN
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2. Perspective on Gas Market Integration
| 23
Possibility and Opportunity
ASEAN Gas Market Integration