Asia Offers Huge Opportunity for US LNG: Birol
The United States has huge opportunity to supply LNG to Asian buyers, especially China, Fatih Birol, executive director of the International Energy Agency told the US Senate Committee on Energy and Natural Resources January 16.
“China is moving in the direction of gas. They are going to import a lot of LNG to replace their coal,” he said: “From the LNG point of view, I see significant chances to provide gas to gas-hungry Asia.”
US senator Lisa Murkowski chaired an oversight hearing focused on the domestic and global energy outlook, featuring testimony from Birol. During the hearing, Murkowski and Birol discussed significant improvements taking place in energy technologies and energy policy, ranging from increased oil and gas production to cost reductions in renewable energy and the continuing potential of nuclear energy.
According to Birol, China’s transition towards a more services-based economic model is moving the energy sector in a new direction. The emphasis in energy policy is now firmly set on electricity, gas and cleaner, high-efficiency and digital technologies, he said.
China provides a quarter of the projected rise in global gas demand with projected imports of 280bn m3 in 2040, he said. “This is second only to those of the European Union, making China a linchpin of global gas trade.” Birol said that China remains a towering presence in coal markets, but that IEA projections suggest that Chinese coal use peaked in 2013 and is set to decline by almost 15% over the period to 2040.
Recently, Lu Ruquan from CNPC’s overseas department said that the rebound in demand for natural gas in China in 2017, will lead to “rebalancing” and more market driven reforms in the future. During the period January to November 2017, China imported a total of 84.bn m3 of natural gas, up 26.9% year on year, of which 46.2bn m3 were LNG imports, an increase of 49%.
Birol also said that India was another important market from US LNG point of view. Just like China, Indian cities too are facing environmental challenges in the form of pollution, forcing authorities to promote gas in place of coal and other traditional fuels such as fuel oil and petroleum coke. Recently, the Indian Supreme Court banned usage of fuel oil and petroleum coke in industrial unit in Delhi and surrounding areas.