Shell says Asia LNG demand growth will absorb supply

Shell says Asia LNG demand growth will absorb supply

Shell exec sees huge potential demand from China and India.

November 1, 2010 2:18 by Reuters

Strong Asian demand for liquefied natural gas (LNG) will be enough to absorb growth in supply, a senior executive at oil major Royal Dutch Shell said on Monday.

“If you look at the potential demand from China and India it’s huge, China could treble LNG demand from 2010 to 2020, and double it again by 2030,” Malcolm Brinded, executive director at Shell Upstream International, told Reuters on the sidelines of an industry conference.

China’s LNG demand in the nine months to end-September rose more than 70 percent from the same period the previous year to 6.8 million tonnes.

Brinded said LNG was the cheapest way Asian countries could meet their CO2 targets, adding that he also saw demand ramping up from Singapore, Vietnam, Malaysia and Indonesia.

Established consumers such as Japan, Taiwan and South Korea were also in the market for more LNG, he added.

Qatar, the world’s top LNG exporter, is ramping up output, while supply from Australia is set to explode as projects come onstream, raising worries about the market’s ability to absorb the new material.

Shell has a 50 percent stake in the Arrow LNG project in Australia, and is also 30 percent owner of the 7.8 million tonnes per year Qatargas 4 train 7, which will be operational from February next year.

Shell’s investment in Australia would be “very substantial” throughout the decade, Brinded said. “It’s very clearly tens of billions of dollars.”

He declined to give an exact figure.

(Reporting by Simon Webb; editing by James Jukwey)