Asia's total energy market will double in size the next 20 years, led by a boom in natural gas trade.
Oil's share of that market will shrink to 42% from 51% as environmental concerns focus on increasing the role of natural gas in Asia's energy mix, according to BHP Petroleum (Americas) Inc., Houston.
"The infrastructure to bring gas to market will be an enormous opportunity in the coming decades," John Froning, vice president of exploration for BHP Americas, told a National Oilfield Manufacturers & Delegates Society (Nomads) luncheon during the American Petroleum Institute annual meeting in New York earlier this month.
ASIAN GAS GROWTH
Gas consumption grew by 130% in Asia during the 1980s, while world average gas use grew by less than 40%.
Asia's gas consumption growth is likely to slow to 50% during the 1990s, but that will still be more than double the growth in the rest of the world, BHP contends.
"The existing price structure won't justify many gas development projects," said Froning, so nations will have to pay more to reap the environmental benefits of natural gas.
Though there is a large supply of natural gas in the region, a greatly expanded gas pipeline network is needed to link supplies with consuming areas. A high pressure gas pipeline network in the Far East that has been proposed by a group of Japanese companies would require construction of about 27,000 km of new pipelines by 2020 at an estimated cost of $42 billion (Australian). According to Froning, 10 15 new trunk line projects are currently planned or under way.
The network would include a line from Russia's Sakhalin Island to Japan, and connections with other fields in Russia and in China.
Pacific Rim liquefied natural gas trade also will continue to expand at a healthy pace until 2020 (Chart). Froning said the cost of submarine gas transmission lines is competitive with LNG transportation up to a distance of 1,500 km, and a land transmission line can compete with LNG shipment over distances of as much as 3,000 km.
OIL GROWTH ALSO SEEN
Even though oil's market share will shrink in the Asia Pacific region, demand for petroleum products nevertheless will increase significantly.
There will be continued healthy economic growth in the next 10 years, said Froning, as people "get off bicycles and onto Mopeds and off Mopeds and into cars."
As a result of improved living standards Froning expects petroleum product demand to grow by 3%/year in Asia in 1995 2000. Japan will grow at only a 1%/year rate, the rest of the region at 4%/year.
As an example of exploding growth for petroleum products, Froning cited South Korea's increase in gasoline demand last year of more than 50%.
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