Demand for clean energy remains strong in Asia Pacific
According to the latest analysis from Frost & Sullivan, demand for clean energy looks set to remain strong in Asia Pacific for 2015, despite volatile oil prices.
Renewable energy, rationalisation of fuel subsidies and changing economic policies are set to impact various industries as they look to transform and keep their business relevant amidst the backdrop of volatile oil prices.
Oil
With no impending change in Saudi Arabia's energy policy, the oil price could temporarily hit low US$40 levels, or even lower for a brief period in 2015. The majority of the world economies will stand to benefit from low oil prices, thus stimulating economic growth to take the supply glut off the market. The demand for oil is projected to increase by 1 million bbls daily in 2015-2016, with China being one of the key demand drivers.
However, the declining oil prices could have a negative, long-term impact on selected industries and countries.
"If oil prices stay below US$75/bbl over a longer period (more than 2 years), then more than a quarter of the planned deep water projects in the region will not be viable. In addition, depending on the amount of crude oil stored, refiners will have high inventory value loss in the short term," explained Ravi Krishnaswamy, VP, Energy & Environment Practice, Frost & Sullivan Asia Pacific.
LNG
The impact of lower oil prices will also lead to lower LNG prices in the near future although its usage will be partially challenged by the revival of nuclear energy and strong interest in coal due to uncertainties in overall oil and gas investments. Japanese landed LNG prices will see the sharpest decline, to nearly US$12/million Btu by 2020, if the current trend continues.
The lower LNG price is likely to stimulate demand for LNG-based power projects. China has the opportunity to capitalise on low LNG prices to clean up the environment and shift to gas based power generation in a big way.
However, the downside of low gas price is the likely delay or cancellation of some LNG production projects in Australia and East Africa, which may not be viable without a significant cost reduction.
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/06022015/asia-pacific-wants-clean-energy-200/
You might also like
EIA: US natural gas trade will continue to grow with the start-up of new LNG export projects
The U.S. Energy Information Administration’s recently released Short-Term Energy Outlook forecasts that US LNG exports will continue to lead growth in US natural gas trade as three LNG export projects currently under construction start operations and ramp up to full production by the end of 2025.
