Gushing towards greener energy
November 1, 2010

Burning for cleaner fuels, both China and India have sharply upped demand for Liquified Natural Gas in the past three years. Owning to the huge demand from Asia, Qatar, at the recent Singapore Energy Summit agreed to send an additional 7 million tonnes of LNG to China and another 5 million to India annually. The world’s largest LNG producer, also said that due to Shale gas keeping prices low and supply far outstripping demand, it would be diverting LNG from America to China and India.

“If you look at the potential demand from China and India it’s huge, China could treble LNG demand from 2010 to 2020, and double it again by 2030,” Malcolm Brinded, executive director at Shell Upstream International, told Reuters. China’s LNG imports are set to surge this decade to reach 46 million tonnes by 2020. Brinded continued that LNG was the cheapest way Asian countries could meet their CO2 targets, adding that he also saw demand ramping up from Singapore, Vietnam, Malaysia and Indonesia.

Anticipating LNG demand to rise, New Delhi and Beijing are both vociferously investing in LNG fields in Australia, Myanmar and Malaysia and Qatar. The two nations recently jointly invested in Myanmar’s gas pipeline. China currently has three LNG plants on stream, four under construction and two are planned. India currently has two LNG plants on stream, two under construction and another planned for, according to recent data.

As Australia begins to pipe gas upstream by the end of this year, and soon start supply to Asia, regulated gas prices in China and India will continue to rise because of the higher cost of imported LNG. Indian gas prices have doubled and China’s by 25 percent this year. Australia, currently accounts for less than 10 percent of LNG production, but makes up for one third of incremental new LNG capacity under construction and 50 percent of possible new projects.

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