Durable LNG supplies key to ensuring the world gets the energy it needs
Flexible chains and evolving markets are required for LNG to flourish amid balanced supply and demand dynamics in the near and long-term. The influence of portfolio players and converting India’s vast transportation network could play roles in sustaining appetite. These were among points raised during second day Leadership Panel “Managing global LNG supply and demand dynamics: building capacity and supply chains that meet future growth scenarios”.
Having heard about India’s substantial targets regarding gas during the opening ceremony of India Energy Week, The Resilience Stage was told gas and LNG markets were on the “cusp of exciting times”.
Scaling reliable and flexible LNG supply chains has increasingly been cited as a realistic solution as energy demand rises around developed, power-hungry emerging markets. But the audience heard the industry was on the verge of a major LNG supply wave, with 35 to 37 million metric tonnes of LNG supply coming on stream this year alone; about 8% of global LNG supply. From 2027 to 2030, that could figure could be another 135 or 137 million metric tonnes.
Andrew Barry, Chairman, ExxonMobil LNG Market Development Inc., and VP, Global LNG Marketing, ExxonMobil Asia Pacific Private Ltd, was among those confident that demand would meet supply, including from his own company’s projects.
“From ExxonMobil’s perspective, we are very bullish about demand for LNG over the coming decades. We’re one of the most bullish when you look at third-party and other company estimates.
“There’s many reasons for that. We believe very much the way that natural gas can partner with renewables, the way that it’s fungible, the way that it can replace alternative fuels, makes it very attractive during this period.
“And so our forecast is that between now and 2050 we’ll double the LNG demand in the market.”
Keeping supply and demand in step with each other so supply doesn’t overshoot demand, as it did with the 2015 to 2020 wave, was highlighted. “What makes us very confident about longer-term demand for LNG is that we see that even in the base case there is a lot of latent demand that can become unblocked with the additional supply that comes on,” Barry continued, citing India as a fantastic example with 20GW of gas-fired power generation under construction.
Previous high prices had held back demand but had moderated a lot with supply with portfolio players increasingly sitting between producers and end-users. Ronan Bescond, VP, Long-Term Marketing and Origination, TotalEnergies Gas and Power Limited, said: “The portfolio player is something that will bring to the customer geographical diversity and integration along the chain.”
“You know, in the world we live in, security of supply is coming back at the top of the agenda. There is always something happening and it’s becoming incredibly challenging for both the seller and buyer to navigate.
“That’s where a portfolio player like us is coming. We are exposed to different markets, we can offer diversity of index to the customer. For a customer, they see the portfolio player as someone that will deliver the molecule, no matter what.”
Izumi Kai, CEO, JERA Asia, spoke of “the need to manage the uncertainty” of the future demand. “So more and more flexible LNG contracts, including shipping arrangements by ourselves, are quite important.”
Akshay Kumar Singh, MD and CEO, Petronet LNG, painted a positive picture for India’s demand and infrastructure growth. “By 2030 the government is targeting to increase the natural gas share by 15%… that translates into almost more than three times present consumption of natural gas in the country,” he said.
“Today, we are able to meet 50% domestic and 50% imports in the form of LNG. But going forward, the LNG volume is going to be more than 100 million tonnes. “On infrastructure we are moving quite nicely. We are developing a lot of infrastructure to reach to consumers where we can consume that extent of LNG.”
Singh and other panellists cited India’s transportation sector as a huge potential LNG user.
“Our estimate is that the 450,000 long haul trucks, if converted to LNG, will consume 10 to 12 million tonnes,” he added. “And that is quite doable.”
