GAS AND POWER: South East Asia looks for more gas
| Published date | 01 October 2017 |
| DOI | http://doi.org/10.1111/oet.12530 |
| Date | 01 October 2017 |
GAS AND POWER
South East Asia looks for more gas
Falling production of natural gas is forcing Indonesia
and ailand to look overseas for supplies and Mal aysia’s
exports look like being squeezed by rising domestic
demand. e bright spot– in every way– is Vietnam,
where a ra of recent discoveries is on the way to being
developed, more than doublingproduction over the next
decade. Even here, thou gh, rising output will not be suf-
cient to satisfy the projected increase in domestic con-
sumption. Liquied natural gas (LNG) imports will be
needed as well, perhaps as early as 2021.
All four countries are signicant gas producers and
two of them– Indonesia and Malaysia– are exporters of
LNG. Vietnam is self-sucient in gas and ailand is
a net importer (see Table D). Output has been rising in
recent years in Malaysiaand in Vietnam: in the other two
countries it is in decline.
Indonesian decline
Indonesia’s gas production has b een going down since
2010. Gas consumption has been reduced to ensure that
Indonesia meets its long-term contractualcommitments
to its LNG customers, leaving a largeand growing unsat-
ised demand for gas at home. ere had been high
hopes of a large discovery in the South China Sea, at
East Natuna, which was estimated to contain about 45 tcf
of recoverable gas; but the remoteness of the eld and
the high carbon dioxide content of the gas defeated all
attempts to nd an economic way of developing it, and
this year, ExxonMobil, which was examining the fea-
sibility of developing the block, decided that this was
impossible under existing market conditions.It had been
mooted by the state energy company, Pertamina, that
rst gas would be available by 2022. Pertamina now
hopes for a start-up in 2030, but no one is rushing to
agree. Indonesia meanwhile has been looking for LNG
to import from about 2019 onwards.
Malaysian exports
Malaysia is maintaining a reasonablyconstant volume of
net exports at roundabout 3 bn cfd thanks to a ste ady
rather than spectacular growth in its production. Such
growth, however, is under threat from low international
gas prices and cuts in oil and gas companies’ upstream
budgets, includi ng that of the national oil and gas com-
pany,Petronas.
Production has grow n by only about 1% annually
overthelast10years,whilstdemandhasrisenbyabout
twice that level. Nearly all domestic consumption is for
industry or power generation. e government plans
to keep the growth of demand in check by substituting
coal for natural gas, thus, helping to ensure there is
Table D
South East Asia: Gas Prole, 2016
Malaysia
Proven Reserves 41.3 tcf
Reserves Remaining 15.8 years
(bn cfd)
Production 7.1
Consumption 4.1
Net Trade 3.0
Indonesia
Proven Reserves 101.2 tcf
Reserves Remaining 41.1 years
(bn cfd)
Production 6.7
Consumption 3.6
Net Trade 3.1
Thailand
Proven Reserves 7.3 tcf
Reserves Remaining 5.4 years
(bn cfd)
Production 3.7
Consumption 4.7
Net Trade (1.0)
Vietnam
Proven Reserves 21.8 tcf
Reserves Remaining 57.6 years
(bn cfd)
Production 1.0
Consumption 1.0
Net Trade –
Totals rounded
Source: BP Statistical Review of World Energy,2017
enough gas to meet export commitments. Despite this,
Malaysia already has to import small volumes of gas by
pipeline from Indonesia and as LNG to meet demand in
Peninsular Malaysia, which lie s well away from the main
producing elds o Sabah and Sarawak.
Thai imports
ailand’s main gas concerns lie with imports. D emand
hasbeenrisingatcloseto5%ayearforthepastdecade
whilst its output has begun to decline since 2014, falling
annually at a r ate of 4%. ere appears to b e little chance
of reversing the decline, and it may well accelerate. Cur-
rent ocial forecas ts predict that production w ill decline
to zero by 2033, when demand could well be close to
7bn cfd.
With oil production at a plateau for some years, the
government has selected natural gas to meet much of
the future growth in energy demand, especially in elec-
tricity generation. It was hoped initially thatgas produc-
tion would carry on rising as it had in the years before
© 2017 John Wiley& Sons Ltd
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