The evolving role of LNG in bringing energy stability amid the rise of renewables
Dialogue along with strong consumer and producer relationships will be needed as LNG demand grows rapidly in coming years amid rising power demand.
That was among the messages from an Executive Leadership Panel entitled ‘LNG demand outlook scenarios: A new era for consumer producer engagement’.
The conversation highlighted the need for infrastructure development, affordability, and collaboration between producers and consumers to ensure sustainable energy transitions, and address LNG price volatility.
The audience heard how Europe increased its LNG import capacity by 45% since 2022, replacing Russian gas, while Asia, especially India, is expected to see significant growth, with India aiming for 15% natural gas in its energy mix by 2030.
Akshay Kumar Singh, MD & CEO, Petronet LNG, said India had almost 52 million tonne per annum regas capacity.
“We are in the process of adding 20 million tonne more into two/three years,” he said, citing a list of impressive transmission and pipeline connectivity developments.
“The target is to cover the entire population of India in the next five years. Probably in two years’ time, almost 170 million tonnes of LNG capacity will be added across the globe.”
Yumiko Yao, Executive Officer & SGM - LNG Business Dept. Energy Trading, Tokyo Gas, emphasised the role of natural gas in balancing renewable energy in Japan.
She also called for collaboration, transparency and information sharing across the natural gas value chain to reduce leakages and improve efficiency while reducing emissions.
Alan Heng, CEO, Singapore GasCo, explained his new company - a centralised, aggregator and importer of natural gas for the power sector - aimed to secure long-term LNG supplies when asked how Singapore was leveraging flexibility and reliability to ensure energy security and price competitiveness.
“In Singapore, 95% of our power generation is through natural gas,” he said. “We are very resource-constrained as a country. The country has an ambition to move towards a cleaner future, and part of that is to import green electricity from our neighbours,” he added.
“But until that happens, until we get comfortable with the intermittency of renewable energy, natural gas will play a key part to Singapore’s energy pathway. Our mission is to ensure energy security and an affordable enterprise for our consumers.”
While Heng acknowledged the importance of long-term contracts in securing energy he called for more flexibility in the producer and consumer relationship.
“Some countries are more fortunate than others…in terms of the resources available to them,” he said. “But if there’s sufficient consumer to consumer collaboration, then we have this opportunity of actually working together towards a greener future…we must have sufficient flexible producer, consumer contractual relationships, otherwise we can’t even get there.”
Singh also noted price fluctuation as the major challenge for LNG. “The cost of production is not so high, but because of geopolitics, prices are becoming so volatile it is becoming unaffordable for developing countries, and that concern needs to be addressed in the future to maximise use of the natural gas,” he said.
“This beautiful commodity should not remain below the ground…natural gas is going to remain for at least three to four decades a transition fuel. Keeping this aspect in mind, India is spending lot of efforts on infrastructure development."
Michalis Thomadakis, Chief Officer - Strategy & Development, DESFA, reiterated the importance of gas to replace fuels such as coal.
“Southeast Europe is currently burning something like 100 million tonnes of lignite per year for various reasons,” he said.
“All this coal production will gradually, not only in Europe, be replaced by gas. So not only LNG, but also the rest of their national structures, are important for the resilience of the energy system, until technology delivers the possibility for electrons to take over fully.”
Addressing the war in Europe, he acknowledged the continent was “dependent on LNG and not on Russian gas anymore”. Thomadakis added: “However, should peace arise in Ukraine, Russian gas may also be available.”
