“The expansion of natural gas and LNG can be expected to contribute to cleaning and diversifying energy supply and reducing Asia’s dependence on energy imports from the Middle East,” said Ken Koyama, IEEJ chief economist and managing director.
Japan is set to remain the world’s No.2 LNG importer, after China. So, the Japanese market still provides ample opportunities for LNG sellers, particularly as existing contracts expire. Japan’s LNG imports are expected to remain above 70 mmtpa through much of the 2020s, and may even exceed 60 mmtpa until at least 2040.
Price is, however, still a big issue. Koyama stated that pipeline gas and LNG were not necessarily the perfect energy source and the biggest challenge remained how to make them more price competitive, more affordable, more attractive and easier to be selected as preferred energy.
Energy security that has become a major matter of concern because of Asia’s growing dependence on energy imports. “Substantial energy demand growth makes it important for Asia to tackle environmental problems. A particularly important problem involves Asia’s structurally high dependence on fossil fuels including coal,” he stated.
Dirty king coal
Across Asia, thermal coal accounts for around 48 percent of the primary energy consumption, far higher than the global average at 27 percent. “Coal has become a main energy source in Asia, including China and India, as large energy consumers because coal has been locally abundant and price competitive in Asia,” the IEEJ report reads.
Massive coal consumption has boosted carbon emissions and air pollution, which directly caused serious air pollution as an urgent, grave environmental challenge.
China, India and Southeast Asia are expected to boost energy demand and will face a rise in their dependence on energy imports, particularly oil purchases from the Middle East,” it explained.
“The Middle East for its part must give priority to the Asian market as its dependence on Asia increases,” said Mr. Koyama’s report said, concluding; “In this sense, Asia and the Middle East will grow more interdependent.”