PROGRESS 2015-2016 ECONOMY
“We believe that economic growth, urbanisation, environmental policies and the application of new technologies all support the long-term future of our LNG industry.”
ALAA ABUJBARAARA
CHIEF OPERATING OFFICER (COMMERCIAL AND SHIPPING) QATARGAS
the years and we can react quickly to spikes in demand from individual countries,” he said. According to him, two factors are likely to make global demand continue to outpace global supply. While energy demand in Asia is expected to remain robust, even after taking into account a slowdown in Chinese growth, global LNG exports are unlikely to meet the growing global demand, leading to higher LNG prices. Additional exports are unlikely to materialise before then. In particular, the so-called US shale gas revolution is not expected to lead to additional LNG exports before 2020. Countries like China, India, Indonesia, Malaysia, Pakistan and Thailand have just started to rely on LNG supplies for their energy needs, and this trend is likely to grow over the next few years. “China’s rising pollution is the other factor which will mandate a switch from coal to cleaner energy sources, particularly LNG and pipeline gas. As the largest exporter in the world, Qatar is likely to benefit from higher LNG prices, resulting in large current account surpluses for years to come,” he said. SPURT IN DEMAND Secretary General of the Doha-based Gas Exporting Countries Forum (GECF) Dr Seyed Mohammad Hossein Adeli too says that the global energy demand would continue to rise, particularly for clean and environmentally friendly sources and the natural gas market is destined to keep expanding with the blue fuel penetrating into more sectors of the economy. “The role of natural gas in the battle against greenhouse gas emissions is gaining momentum, especially with COP 21, a crucial and decisive event if we want to leave our world a suitable place for future generations,” Dr Adeli said. In terms of energy perspectives to 2040, the GECF project that primary energy demand will continue to increase, while the market shares of oil and coal are expected to decline. Biomass, nuclear, hydro and renewables are gaining share but natural gas will benefit the most, ensuring the convergence towards global GHG emissions commitments, Dr Adeli added.
40
BRIGHT FUNDAMENTALS In a paper entitled “Changing Global Gas Dynamics” focused on the recent changes affecting the global gas and LNG markets, which was presented at the Gastech 2015 Conference in Singapore recently, Qatargas Chief Operating Officer (Commercial and Shipping) Alaa Abujbara said that the long-term fundamentals for natural gas and LNG were bright. “The global gas demand would grow by about 2% per year over the next five years, which is slightly lower than previous forecasts. The slower growth is attributed to lower electricity demand growth in Asia, and lower oil prices leading to less infrastructure development in the Middle East. However, we believe that a strong political will for clean air policies is expected to spur gas demand,” Abujbara said. The changes are expected to be seen over the medium to long term, he said, adding that the global energy sector was going through a fundamental re-balancing process, characterised by new market dynamics and price volatility. “We believe that economic growth, urbanisation, environmental policies and the application of new technologies all support the long-term future of our industry,” Abujbara said. Abujbara added that in the LNG sector, the global market has been adjusting this year to a number of factors including the lower oil price, lack of short-term demand from the traditional Far East markets, new markets appearing in the Middle East and ample supply from existing and new producers, all of which have led to an uneven market where each region is attempting to balance local supply and demand. Global LNG trade, he added, currently stands at around 250 MTPA but is expected to reach over 400 MTPA by 2025. Abujbara said that the LNG industry is capable of developing the supply base required to meet future demand. With the right set of fundamentals in place, the industry will fulfil its promise of delivering available, affordable and acceptable LNG. “We must remain vigilant in advocating for the future of our industry,” he added