Risco's Chris Newton highlights opportunities and challenges in Asia's rapidly changing oil and gas environment.
Asia's need for energy investment is immense. Non-OECD Asia is the key driver of global growth and consequently primary energy consumption. Gas is set to be the world's fastest growing fossil fuel to 2035, and together with renewables, are the only fuels to see increases in their share of the primary energy mix, although coal growth will continue near term in some major non-OECD Asian economies.
In the context of energy, power generation is the main global growth driver. Combined with high oil prices this explains the recent, and in some cases continuing, role of coal in the primary energy mix. However, the recent significant fall in oil prices, and their consequent impact on oil-linked Asian LNG pricing, means that continued low Asian LNG spot prices may further stimulate a magnitude of switching from coal's role in power generation.
Such demand further exacerbates Asia's increasing thirst for gas - which is set to to make the region the destination of over 50% of global gas imports by the 2020s. This is exemplified in both SE Asia and Indonesia, which are facing a transformation from gas exporter to importer.
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