If, as the International Energy Agency speculates, we are about to enter a 'Golden Age of Gas', the Asia-Pacific region will be a major player in it. In particular, the region's robustly growing energy needs, of which natural gas will play no small part, means that it will become a major focus for both existing and prospective exporters of LNG for the rest of this decade and beyond.

Asia-Pacific gas market

The Asia-Pacific region contains major gas-consuming markets with virtually no gas resources of their own (Japan, South Korea and Taiwan), markets that produce gas domestically but not enough to avoid growing dependence on imports (China and India), and exporters of gas in the form of LNG (Malaysia, Indonesia and Australia). While Asian oil consuming economies will rely on sources from outside the region such as the Middle East for crude oil, its gas profile is somewhat more complex.

The Economist Intelligence Unit (EIU) estimates that gas consumption in the Asia-Pacific region will reach just short of 800 billion m3 by 2014, compared to 558 billion m3 in 2010. By 2014, therefore, the EIU forecasts that gas consumption in the region will exceed gas demand in the US, and represent 21.5% of global gas demand.

Energy mix

While economic growth is an obvious driver for the increase in gas consumption, the EIU forecasts growth to average around 8% in China and around 6% in Asia-Pacific between 2012 – 2014, other policy-related drivers will also play a part. India and China are particularly reliant on coal for power generation. Natural gas, which represents a very small proportion of China and India's energy mix, is viewed as a solution to diversifying sources of energy supply while also limiting growth in carbon emissions resulting from rapid economic development. Meanwhile, in Japan the Fukushima nuclear accident in 2011 will result in greater reliance on non-nuclear sources of fuel in the longer term.

The Asia-Pacific region is in fact already a major player in the global LNG scene, with the region accounting for over 63% of total global LNG imports in 2011 of 241.5 million tpy. Japan and South Korea are the two largest importers of LNG, with imports of 78.8 and 35.8 million tpy respectively in 2011. China (12.8 million tpy), India (12.7 million tpy), Taiwan (12.2 million tpy) and Thailand (0.7 million tpy) also imported LNG.