Insight
Can Asia avert a gas supply crisis?
Report summary
Governments across Asia need to prioritise the development of domestic gas resources to delay an over-reliance on higher-cost imported LNG. Domestic gas demand is booming but supply is declining. This means more LNG imports, more price risk and less security of supply. A significant decline in upstream output is inevitable, unless governments do more to incentivise both IOCs and NOCs to develop Asia’s remaining gas resources. In this insight we interrogate our key assumptions on gas in Asia: how much is left, what are the likeliest up- and downside scenarios for supply and demand, and what are the implications of regional dependency on imported LNG. Asia has many attractive ingredients – prices, infrastructure, demand – but exploration activity will continue to decline without incentives. The energy transition has permanently changed corporate investment strategies. For LNG producers, Asia could provide significant upside demand above existing forecasts.
Table of contents
- Executive summary
-
The looming gas supply crisis
- The Asia gas growth story
- The Asia gas resource story
- Balancing demand and supply – substantial LNG demand upside
- Substantial risks to the supply base case
-
Supply risks
- Exploration at current levels is insufficient to avert domgas declines
- The capital conundrum
- What happens if we wind-down upstream?
- Downside risk is not just a scenario – Myanmar is a case study
- Not just Myanmar – a whole suite of big mature gas fields at risk
- The importance of fiscal evolution and clarity
-
Demand risks
- Downsides
- Upsides
- Cost of supply: gas’ window of opportunity will not be open for long
- Final thoughts
Tables and charts
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