Reuters are reporting that South Asia is emerging as a hotspot for LNG, with Pakistan and Bangladesh set to join India as major consumers, helping to ease global oversupply that has dogged this market for years.
Only India and Pakistan currently import LNG in South Asia, taking in a combined 25 million t, or 8% of global demand last year.
But with a fast growing population, strong economic growth and soaring energy demand, more import projects are being developed, lead by Pakistan and Bangladesh.
Pakistan only started importing its first LNG in 2015, and surprised some in the industry by developing its first terminal within schedule and budget. A second is about to become operational and a third is expected to be completed next year.
With Bangladesh set to join the club of importers next year, the region could import 80 – 100 million tpy by the mid 2020s, making it the world's second biggest import region, ahead of Europe.
Bangladesh, a country of over 160 million people, could import as much as 2500 million ft3 per day of LNG, equivalent to around 17.5 million tpy, by 2025.
With its own gas reserves depleting and seeking to almost double power capacity to 24 000 MW by 2021, Bangladesh is tapping cheap and plentiful supplies on world markets and investing heavily in LNG.
Several FSRUs, the first developed by private US company Excelerate Energy, are due to begin importing cargoes starting in 2018.
Both FSRUs will be deployed off Moheshkhali Island in the Bay of Bengal, in the southeast of the country. They will have a combined capacity of 7.5 million tpy.
Two more FSRUs are planned, though no exact dates have been finalised. In addition, state-run Petrobangla signed a preliminary deal with India's Petronet in December to set up an onshore terminal to regasify a further 7.5 million tpy of LNG on Kutubdia Island, just to the north of Moheshkhali, at a cost of US$950 million.
Those imports would add to plans from India and Pakistan to buy 50 million and 30 million tpy of LNG, respectively, by the mid-2020s.
Should all plans in the region go ahead and Sri Lanka also start imports, this figure could rise to 100 million t.
That would push South Asia's demand ahead of Europe as the world's second biggest LNG import region by 2020, though it would still lag North Asia's 150 million t of annual imports.
The boom in demand will help ease oversupply in LNG markets, which have resulted in a more than 70% price fall from their 2014 peaks to US$5.75 per million British thermal units.
Bangladesh was in talks with Qatar's RasGas and Indonesia's Pertamina for long-term deals, while it also planned to import significant amounts of its future demand via the freely traded spot market.
Rupantarita Prakritik Gas, part of Petrobangla, in June posted a notice looking for LNG suppliers for spot cargoes from 2018.
Not everyone believes Bangladesh and Pakistan will achieve their LNG ambitions.
Low domestic gas prices also required LNG imports to be subsidised in Bangladesh and Pakistan.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/02082017/south-asia-becomes-global-lng-hotspot/