The LNG market in Asia has been developing quickly in recent years, with the growth of the industry being a hot topic within the energy industry.
One of the factors that has been undoubtably causing the expansion of the LNG market in Asia is the seismic shift in global energy use. Many governments in Asia, and indeed across the world, have been looking for alternative energy streams so that they can transition to more renewable sources and ones that cause less damage to the environment. One of the main options open to governments in liquified natural gas.
Japan, China and South Korea now account for around 60 per cent of global LNG demand. In China, their hunger for LNG is mainly driven by a need to reduce their dependence on coal-fired power plants. In Japan, they are concerned about finding less damaging energy sources, but the Fukushima nuclear disaster accelerated demand after nuclear plants went offline. Elsewhere in Asia, countries like Indonesia and the Philippines are finding that vessel-borne liquified natural gas is a convenient, cleaner and cheaper way of receiving energy due to their geography which comprises of many smaller islands.
Specifically, this odourless, colourless, non-toxic and non-corrosive source of energy is becoming ever-popular in off-road, maritime, high-torque engines and rail applications. Indeed, it is thought that all the uses of LNG are yet to be uncovered meaning that the LNG market in Asia is sure to keep growing.
Effect of Asia on the LNG Market
With LNG arguably becoming the ‘fuel of choice’ in Asia, the region is having to adapt how the gas is safely transported and stored. While land-based terminals were popular in the past, floating systems have become more in demand. The cost of using them has become more affordable and they are able to quickly respond for those who have more immediate demands.
For example, constructing a land-based terminal for LNG in Asia requires permits, approvals and then lots and lots of time. However, creating a suitable environment at a port for a floating storage and regasification unit (FSRU) where it can be connected to shore via a pipeline is much cheaper and faster to implement.
Floating terminals are known to offer other benefits as well. These include being secure and flexible operations in more volatile areas and, for those who run them, are easy to relocate to other areas if an opportunity presents itself.
Countries like India, Thailand, the Philippines and Vietnam are all taking advantage of the opportunities that FRSUs present to them in regard to their intake of LNG.
Singapore and LNG
If we are reviewing the LNG market in Asia, it is prudent to look more closely at Singapore. Building on its history of being able to make the most of new opportunities thanks to its geography, Singapore is looking to establish itself as a regional hub in Asia for LNG trading. The country’s Maritime and Port Authority (MPA) is specifically focusing developing an LNG fuel supply infrastructure, while also implementing policies to potentially create the world’s largest LNG fuel supply port.
In February 2018, it was announced that the fourth liquefied natural gas storage tank at the Singapore LNG facility was set to be completed. The impressive storage tank increased the facility’s storage capacity by 260,000 cubic meters to a total of 800,000 cubic meters.
More recently, in September of this year, Asia’s largest LNG bunkering vessel reached its first milestone with a strike steel ceremony held at the Sembcorp Marine’s shipyard. The new ship will be the second LNG bunkering vessel in Singapore and is expected to start its life in service once it is delivered to Pavilion Energy in 2021.
Japan and LNG
Japan has long relied on LNG for energy security and power generation but its focus on LNG has been strengthen over the past few years. Specifically, is has been driven by two objectives: reducing the country’s reliance on foreign suppliers while simultaneously promoting environmentally friendly sources, the most significant of options being liquefied natural gas.
In regard to specific projects; In October 2017, Japan declared plans for a $10 billion public-private effort to construct LNG terminals, power plants and other facilities to help meet the rising energy demand across Asia. This widely applauded and long-term approach will help grow demand for natural gas across Asia and ensures that Japan is at the heart of that expansion.
A particular beneficiary of Japan’s energy strategy is likely to be the United States. The requirement for Japan to sustain a diverse portfolio of suppliers will probably see them being an increasingly significant export market for US LNG for many years to come.
China and LNG
In a big move, China became the world’s second largest LNG importer after Japan in 2018 after its imports of LNG nearly doubled on the previous year.
The International Energy Agency said in its “Gas 2018” report that the Chinese demand for natural gas will rise by almost 60 per cent between 2017 and 2023 to 376 billion cubic metres (bcm), including a rise in its liquefied natural gas imports to 93 bcm by 2023.
China’s commitment to LNG doesn’t look like it’s going to wane any time soon and it will be interesting to see how the global industry adapts itself to the country’s considerable requirement.
The LNG market in Asia and Special Piping Materials
The growth of the LNG market in Asia is one that Special Piping Materials has been watching closely for many years. As a specialist supplier of piping, fittings and flanges in a range of exotic metals, we understand the properties of different materials and what is required by the Liquified Natural Gas industry. We also understand what challenges are presented by processing and transporting Liquified Natural Gas and why high quality and strong nickel steel alloys are essential in these tasks.
We are in a perfect position to support the LNG market in Asia as we have an experienced team in Singapore. They have been working with a wide array of heavy industry clients for many years. The team has an enviable reputation for supplying quality materials with efficient delivery timeframes and excellent customer service.
The warehouse in Singapore currently has more than $5 million USD worth of high-quality stock. This is because we know that clients sometimes need specialist products quickly while being reassured that they have been sourced from reputable and dependable mills. Our relationships with leading manufacturers and mills across the globe mean our clients can be assured of the quality of our products and know that they have been tested according to the required specifications.
As an added bonus for the Singapore team, we also have a network of dedicated and knowledgeable agents across Asia. These industry experts help us to gather on-the-ground information about the industry while also helping to support our clients as well. This creates a very strong combination of continent-wide agents and our team’s unwavering commitment to their clients. This means that we are able to react rapidly and efficiently to new opportunities, market changes and industry requirements in the LNG market in Asia and beyond.
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