JUNEASIA BUSINESS OUTLOOK8NEWSROOMCHINA LNG IMPORTS LIKELY TO FALL IN 2025 DUE TO WEAK INDUSTRIAL DEMANDIn a significant move towards decarbonization of the economy in Southeast Asia, Singapore and Indonesia have launched three strategic agreements that are focused on clean energy, carbon capture, and green industrialization. These memoranda of understanding were inked during a high-level visit by the Singapore Minister-in-charge of Energy and Science and Technology, Dr Tan See Leng, and the Indonesia Minister for Energy and Mineral Resources, Dr Bahlil Lahadalia.The landmark agreements aim to further the common regional vision of low-carbon and resilient future. "Today's signing ceremony is not just symbolic. It is a true reflection of both our shared resolve to translate our ideas into actions and to do so in close partnership and mutual trust," Dr Tan stated.Among the major agreements, there is a milestone agreement on cross-border power trade which will open the path to a more integrated ASEAN Power Grid. Not only will it bring energy connectivity in the region, but also it will spur the growth of renewable energy production in Indonesia that will bring employment and long-term investments "Together, Singapore and Indonesia, we are also laying the foundation for a more connected Asean Power Grid and a more secure and sustainable energy future," Dr Tan added.A second agreement is on carbon capture and storage (CCS), making Indonesia and Singapore the first movers of cross-border CCS in Asia. "It is not a new technology, but if Indonesia and Singapore can succeed in making this cross-border CCS a reality, we will be among the first countries in Asia to do so," said Dr Tan.The third agreement is the establishment of a Sustainable Industrial Zone in the Bintan, Batam and Karimun (BBK) area, which is meant to attract green investments and upscale clean industrial actions. Five research firms predict that China's annual liquefied natural gas (LNG) imports are expected to fall for the first time in three years due to weak industrial demand and a good supply of domestic and piped gas.A drop in imports by the world's biggest LNG buyer would increase global supply and drag down Asian spot prices, which are already down 12 percent this year.Imports are expected to fall between 6 percent and 11 percent from the 76.65 million metric tons delivered last year. Previous estimates suggested that imports would fall to an all-time high as stimulus measures from Beijing were expected to boost industrial demand.U.S. tariffs have affected exports of LNG from China, according to Rystad analyst Xiong Wei."China's consumer price index has also posted year-on-year declines for several consecutive months, reflecting weak consumer confidence," said Xiong.According to analysts at Rystad, Kpler and ICIS, overall natural gas consumption has been hit by weak industrial demand and a mild winter.Consumers are moving toward the cheaper domestically produced gas or piped gas, they said.The fall in imports would also be an unusual blip in a sector that otherwise has seen steady growth. According to customs data, China's LNG imports contracted last in 2022 as demand dropped sharply in the pandemic lockdowns.Customs data indicated that China's imports decreased to 20 million metric tons in the first four months of this year, down from about 29 million metric tons in the same time period last year.According to Rystad Energy, gas consumption from the industrial and chemical sectors combined will fall by approximately 1 percent. According to Kpler analysts, combined demand from the industrial and chemical sectors usually rises by 10 to 15 bcm each year."Even with a sudden and sharp rebound in the second half, it wouldn't be enough to offset the weakness seen so far," said Yuanda Wang, a senior analyst at ICIS. SINGAPORE AND INDONESIA FORGE GREEN ENERGY PACT TO POWER SOUTHEAST ASIA'S CLEAN FUTUREKey Highlights· Cross-border power trade to boost ASEAN grid and Indonesia's renewables.· Singapore and Indonesia pioneer Asia's first cross-border carbon capture project.· BBK region to host Sustainable Industrial Zone for green investments.
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