Editor’s Note

ABDUL AZIZ OTHMAN President, Malaysian Gas Association and IGU Regional Coordinator

Striking a balance between energy security, affordability, and achieving reductions in emissions remains a high priority for the Southeast Asia region. The region has developed rapidly over the past two decades, serving as the main engine of global economic growth. In its Southeast Asia Energy Outlook 2022, the International Energy Agency estimates that energy demand in Southeast Asia has increased on average by around 3% annually over the period, and this trend is set to continue to 2030, under a scenario based on today’s policies. To comply with the Paris Agreement, countries across Southeast Asia have set out long-term plans for a more secure and sustainable energy future. Following COP26, at least eight countries in the region have made commitments to reach net zero by 2050 at the earliest and 2065 at the latest, with natural gas to continue playing an important role to achieve those targets.

At a side event entitled Escalating the Role of Gas in Energy Transition on May 11, 2022, the G20 Energy Transition Working Group and ASEAN State Members highlighted how natural gas plays a crucial role in striking a balance between clean energy targets and ensuring affordable energy. Natural gas is not only a lower-carbon alternative, but it also can provide an uninterrupted and flexible energy supply, in particular to the 760mn people globally who have inadequate electricity access and the 2.5bn without clean cooking access.

ASEAN energy ministers in September 2021 emphasised the continuing role of natural gas in bringing about the region’s cleaner energy future, and the need to continue the pursuit of a common gas market for ASEAN by enhancing the connectivity and accessibility. Planned new regasification terminals (RGTs) in Cambodia, Indonesia, Thailand and Vietnam will allow ASEAN to continue to expand the distribution networks in the region. This includes the Trans ASEAN Gas Pipeline (TAGP) and additional regasification infrastructure. By 2020, TAGP had connected six member states through 13 pipelines with a 3,631-km length and 9 RGTs with a combined capacity of 38.75 MTPA.

Indonesia aims to raise natural gas production to 12 bcfpd by 2030, and position gas to have a 24% share of the national energy mix by 2050. To realise its energy security and domestic demand goals, the Indonesian government continues developing gas pipelines and promoting research and development. The government is reaching out to investors to support its gas development programme, for the country to reach its ultimate objective of net-zero emissions in 2060.

The Singapore Energy Market Authority (EMA) in June 2022 established a standby LNG facility (SLF) to enhance the country’s energy security and resilience until March 31, 2023. Relying on imported natural gas to generate around 95% of its electricity, EMA has put in place a set of measures to secure Singapore’s energy supply and ensure the orderly functioning of the broader energy sector since last year.

Vietnam’s power development plan (PDP) VIII (20312030) with a vision to 2045 (“Draft PDP8”), announced in February 2021, envisions gas-fired power emerging as the backbone of the power system, with 22 GW of gas-fuelled generation capacity set to come online in the next decade. The share of gas in the power mix is expected to reach 21-22% in 2030 and 24-25% in 2045. The Philippines has six LNG receiving terminal projects in the pipeline, with the first expected to come online this year, in order to fulfil the natural gas requirements of power plants. According to its Power Development Plan 2020-2040, a rapid increase in power generation from natural gas is vital to provide the country’s intermediate and medium-term supply requirements. As of December 31, 2020, a total of 3.5 GW of committed gas-fired capacity is expected to become operational between 2022 and 2025. By 2040, natural gas will command a share of between 26% and 40% of the total generation mix, depending on the scenarios.