Asia's appetite for natural gas growing fast

Asia's appetite for natural gas growing fast

BANGKOK (Reuters): As global crude prices keep rising, Asian oil consuming nations are turning to less expensive and environmentally cleaner natural gas.

Across Asia from Australia to Japan and India, power producers, which are major users of natural gas, are expected to increase gas consumption relative to other fuel sources as they come under pressure to cut pollutant emissions.

And gas supplying nations are preparing to increase supplies to customers and reduce transportation costs of the highly flammable fuel.

The International Gas Union (IGU), a Netherlands-based global industry body, estimates that global natural gas reserves are sufficient to feed world consumption at today's rate for the next 60 to 70 years.

Global warming, the IGU says, gives natural gas a "fair wind" due to its relative environmental advantages over coal and oil.

In Indonesia, the world's largest gas exporter, domestic gas consumption is forecast to rise nine percent per annum over the next five years to 3.6 billion cubic feet a day (bcfd) in 2005, according to industry body the Indonesian Gas Association (IGA).

Growth has been driven by a steady rise in gas utilization for power generation, says the IGA, which expects gas demand for power generation in Indonesia to more than double to 1.5 bcfd in 2005 from 0.7 bcfd now.

In Australia, natural gas has been the fastest growing energy source, rising at an average rate of more than seven percent per annum since 1973/74, compared with an annual brown coal growth rate of 3.2 percent.

The share of gas in Australia's primary energy consumption could rise to 22 percent by 2005 from 17.9 percent now if state governments put policies in place to encourage gas use, according to projections from the Australian Gas Association (AGA).

Japan, the world's largest importer of liquefied natural gas (LNG), saw LNG imports grow 5.1 percent in 1999, up from rises of 3.9 percent and 2.9 percent reported in 1998 and 1997.

The aggregate LNG demand of Japanese gas utilities is projected to grow at 5.0 percent a year until 2005 from 2000.

Natural gas demand in Korea, the world's fastest growing market in the 1990s, is expected to grow steadily to more than 20 million tons per annum (mta) by 2010, although it is lower than the 28.5 mta originally projected, according to the Chicago-based Institute of Gas Technology.

Indian gas demand is predicted to more than triple between 1996 and 2010, with domestic production likely to hold at about 44 billion cubic metres (bcm) in 2005, rising to 122 bcm by 2010 and 200 bcm by 2020.

China also has an enormous appetite for natural gas largely as a substitute for coal to mitigate urban pollution and to develop western provinces.

Washington-based Petroleum Finance Company recently estimated that growth in Chinese gas demand between now and 2005 will be about seven percent, more than twice the three percent growth rate projected for total energy demand.

Growing demand for gas by power producers across Asia has created hopes of gas explorers and producers to link a pipeline network across Asia.