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Asia Pacific Energy Research Centre (APERC)

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Presentation on theme: "Asia Pacific Energy Research Centre (APERC)"— Presentation transcript:

1 Asia Pacific Energy Research Centre (APERC)
11 APEC EGCFE Workshop 2005 Taipei, Chinese Taipei 21 – 23 March 2005 Thank you for the introduction…. Good afternoon Shiro KONISHI General Manager Asia Pacific Energy Research Centre (APERC)

2 Outline of Presentation
Natural gas supply/demand outlook Gas market reform in the APEC region Key factors affecting the gas market Notable development in APEC Summary for the next 30 minutes, I will talk about the growing demand for natural gas in the APEC region, sources of supply, a glimpse of the gas market structure, the key factors which affect these markets (particularly the future gas demand) and the notable energy developments in the APEC region which somehow have some influence over future gas demand.

3 APEC Regional Grouping
Russia Japan Korea Chinese Taipei Philippines USA Mexico Canada Chile Peru New Zealand Australia China Indonesia Malaysia Singapore Thailand Viet Nam Papua New Guinea Brunei Darussalam Hong Kong, China North America Oceania Latin America Northeast Asia Southeast Asia As you are all probably aware (and for purposes of this presentation), the APEC region is divided into 5 regions, including Russia and China. Therefore we have, Northeast Asia, Southeast Asia, Oceania, North America, Latin America, Russia and China. Over the last 10 years, economies in APEC have been faced with …..

4 Gas Trade Flows in APEC Region
LNG Gas Consumer Russia Canada LNG Gas Consumer Japan China USA Korea Hong Kong, China Chinese Taipei Viet Nam Mexico Thailand Philippines Singapore Brunei Darussalam Malaysia Southeast Asia Indonesia Papua New Guinea Peru Among the economies in the region, natural gas is the fastest growing primary energy of choice. Reserves is almost as abundant as oil but Is widely dispersed. Gas is distributed either through pipeline or as LNG by VLCs. Pipeline Gas Consumer Australia Chile New Zealand

5 Natural Gas Demand in APEC Region
Gas Demand to increase at AAGR of 2.6% ( ) Russia % China % Oceania % SE Asia % NE Asia % Latin America % North America % Natural gas demand is project to grow at 2.6% per annum, from 1135Mtoe in 1999 to 1951 Mtoe in 2020.

6 Natural Gas Demand in APEC Region
China to command the highest AAGR at 8.3% ( ) China L America NE Asia SE Asia 8.3 3.9 3.3 6.3 2.6 1.8 On a regional basis, China is expected to show the highest growth in gas demand at 8.3% between 2000~2020. Latin America with 6.3%, Southeast Asia with 3.9%, Northeast Asia with 3.3%. Oceania with 2.6%, North America with 1.8%, Russia 2%-not including in this slide Source: APERC

7 Contribution to Incremental Gas Demand (1999-2020)
Emerging demand from China and North America Increasing demand mainly driven by Power Sector This slide show that Regional & Sector Contribution to Total Rise in Gas Demand between Russia and North America are expected to account for 19% 34% of the total rise in gas demand. Asia’s contribution ( China 14%, N.Asia 10%,S.Asia 9%) will be(33%) one-third of the APEC total. an 67% of the increase in gas demand will be from transformation for power generation use. 19% for industrial use and 8% for residential, 5% for commercial use. Source: APERC

8 Primary Energy Supply in APEC Region
TPES to increase at AAGR of 2.1% between NRE % Nuclear 1.7 % Hydro % Gas % Oil % Coal % 1951 Gas Oil 1135 TPES is expected to grow from 5659 Mtoe in 1999 to 8777Mtoe in 2020, with an annual growth rate of 2.1%. Natural Gas is projected to grow at 2.6% per annum, from 1135 in 1999 to 1951 Mtoe inn With It’s share in TPES increasing from20 to 22%. the key factors in it’s expansion are rising capita income combine with ease of use, technologies development and environmental concern. Coal Source: APERC

9 Drivers for Power Generation
Technology CCGT(Combined-Cycle gas turbine): thermal efficiency of over 50% Environmental Issue: Kyoto Protocol / Climate Change Power Generation A fastest growth rate of 4.1% than coal Increasing share of gas used for power N.Z.( %),China(18.4%-46.8%),C.T.(51-71%) Increasing share of electricity from Gas-fired plant Singapore(23-52%), Mexico( %),Philippine( %)

10 Primary Fuel for Power Generation
Total energy supply for power generation to increase at AAGR of 2.5% ( ) NRE % Hydro % Nuclear 1.7 % Gas % Coal % Gas This chart show the total energy fuel for power generation in APEC region Total energy requirements will grow from 2092 Mtoe in 1999 to 3524 Mtoe in 2020, at a average annual rate of 2.5%. Gas have the fastest growth rate of 4.1%. Source: APERC

11 Share of Gas in Power Generation Mix
Singapore to post the highest increase in gas use followed closely by Mexico and the Philippines Singapore Mexico Philippines this chart shows the share of electricity generated from gas-fired plant in APEC economies the share of gas in power is projected to increase by 20% in Singapore, Mexico and Philippines by 8% in Chile, USA, Australia, Chinese Taipei and China decrease in Malaysia, Papua New Guinea and Russia. Source: APERC

12 Share of Gas for Power Generation Use
Increasing gas demand mainly for power generation C.T. N.Z Mexico Chile China Australia U.S.A Indonesia this chart shows the share of natural gas for power use the share of electricity in gas demand is projected to increase by 10% or more in Chinese Taipei, Mexico, New Zealand, USA,Chile,Australia,Indonesia,China Decrease by 10% or more in Philippine.Singapore and Peru

13 Key Factors Affecting the Gas Market
Gas Market reform Future LNG Consumers Nuclear Policy in Power Generation Notable Energy Developments in APEC Region Future Climate Change Iniatives: Kyoto Protocol Global interaction of markets New cross-border pipeline infrastructure Although there are various factors that might have significant impact on the supply and demand for gas, I will just focus on 4 key factors: gas market reform future LNG consumers nuclear policy in power generation and notable developments in the APEC region’s energy sector favoring gas use.

14 Gas Markets in the APEC Region
Mature exporters with vertically integrated monopolies Major exporters to other APEC economies Ex: Brunei Darussalam, Indonesia, Malaysia Recent Gas Developers with vertically integrated Largely self-sufficient in gas supply Ex: PNG, Peru, Philippines, Viet Nam If we are to group or categorize the gas market in the APEC region, 6 groups are easily discernable: Mature exporters with vertically integrated monopolies: this group incluldes major gas exporters to other APEC economies (I.e. Brunei Darussalam, Indonesia, and Malaysia. These economies are in fact at the heart of the Trans ASEAN Gas Pipeline Network or the ASEAN Gas Network. There is also the recent gas developers (I.e. with new discoveries) with vertically integrated monopolies: this group is largely self sufficient in gas supply. Economies included are PNG, Peru, Philippines and Viet Nam. Since the development of the gas supply depended largely on demand, most or all of the gas produced are consumed locally. 3.

15 Gas Markets in the APEC Region
Competition at the edge Economies allow competing gas suppliers Ex: HK, Mexico, NZ Dominant Supplier with long distance pipelines Price regulation may make it difficult to invest Ex: China, Russia Mature gas exporters with some competition at the edges include economies which allow competition among gas suppliers (e.g. Hong Kong China, Mexico, New Zealand and Russia). Fourth are the dominant suppliers (however with some transport pricing issues). These suppliers have very stringent pricing regulation that limits investments. The economies in this category are Russia and China.

16 Gas Markets in the APEC Region
Importer with Wholesale Competition and Single Buyer Heavy reliance on gas imports Ex: Japan, Korea, Chinese Taipei, Thailand Evolving Retail Competition with Customer Choice End-use customer have choice of gas supplier Ex: Australia, Canada, Chile, United States The group that is heavy reliant on gas imports with some wholesale competition include economies like Japan, Korea, Chinese Taipei, and Thailand. And finally, the group with a growing and evolving gas retail competition; allows its end-use gas customer to choose their gas suppliers. Economies included in this group are Australia, Canada, Chile and the United States. By carefully understanding the behaviour of economies in these markets, one could accurately project gas behaviour in the future.

17 Future LNG Consumers in APEC Region
Japan Korea Chinese Taipei USA Existing LNG Customer Mexico Philippines Chile New Zealand China Indonesia Singapore Thailand Potential LNG Customer Russia Canada Hong Kong, China Viet Nam Brunei Darussalam Malaysia Papua New Guinea Peru After careful study of the gas market behaviour, it is therefore evident to plot the following future gas consumers….. Australia Source: Strategies Consulting Ltd

18 Notable Energy Developments in APEC Region
New & Facility Capacity Expansion Australia: Greater Sunrise & Gorgon LNG project Brunei Darussalam: LNG 6th train expansion project Indonesia: third Tangguh LNG Project Malaysia: Tiga Project Russia: Sakhalin-1,2 Projects Potential Cross-border Pipeline Infrastructure USA-Canada: Arctic-Canada-US Project Japan-Russia: Sakhalin-1 Project South Korea-Russia: Kovykta Project China-Russia: Sakhalin or Irkutsk Project Malaysia-Thailand: Pipeline linked to Gas-fired plant As a final confirmation to natural gas’ increased demand, the following individual economy initiatives will shape up gas future.

19 Notable Energy Developments in APEC Region
New Potential Gas Supplier Peru: a proposal to export gas from Camisea Field New LNG Receiving Terminal Plan USA/Mexico: New LNG terminal in U.S. Atlantic, Pacific Coast and Gulf of Mexico Chile: New LNG terminal project Chinese Taipei: Second Taichung harbor LNG terminal China: Guangdong, Fujian LNG terminal Korea: Posco, Gwangyang LNG terminal New Zealand: developing LNG terminal Non-Nuclear Homeland Policy Chinese Taipei

20 Summary Growing Gas Demand Increasing Competitiveness on Gas market
Increasing demand mainly driven by Power Generation Environmental Issue: Climate change/Kyoto Protocol Emerging Gas Market: China, India, north America CNG (compressed natural gas ) vehicles Increasing Competitiveness on Gas market Deregulation/regulatory reform in Gas and Power Market Flexible in trade Security of Gas Supply Integrated activity and cooperation in the region Cross-border pipeline infrastructure Mid to long term contract with flexibility In summary, Gas demand is at present and in the future be driven by the demand for power generation Environmental initiatives (I.e. Kyoto Protocol) Changing regulatory environment both for development and future gas investments Trade innovations Concerns on supply security changing contractual terms Will all drive the demand for gas …..


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