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IEA head: investment urgently needed in gas sector

July 10, 2018


Abstract : Investment is urgently needed in global natural gas industry said Fatih Birol, executive director of the International Energy Agency (IEA) on Monday in an exclusive interview with Xinhua.

IEA

Photo: Fatih Birol, executive director of the International Energy Agency (IEA), (R) gives an exclusive interview to Xinhua in Beijing on Monday. 

BEIJING, July 10 (Xinhua) -- Investment is urgently needed in global natural gas industry said Fatih Birol, executive director of the International Energy Agency (IEA) on Monday in an exclusive interview with Xinhua.

“There has been a lot of investment made in last five to six years. But when I look at final investment decisions (FID) for the LNG, it’s very limited. If you don’t make new major FID for LNG sector, we may have difficulties in the next five to six years over time” Birol said.

There are three important challenges in front of the gas industry including price competitiveness, timely investment of LNG and leakage of methane in production and transmission, according to Birol.

“If the gas industry wants to have a bright future, they have to ensure prices are competitive, make timely investment and take necessary regulatory and technological measures to minimize methane going up to the atmosphere,” said Birol.

The gas industry needs to keep gas price at reasonable levels. If gas price goes up substantially and the price is too high, many of the consumers can move to other options like coal, renewable and other things, he noted. “They will scare their customers if the price goes up. Otherwise, many of the LNG buyers are opportunistic buyers.”

A lot of methane gas goes to the atmosphere and the gas industry needs to fix leaks. It’s estimated that 76 million tonnes of methane goes to atmosphere each year and half of the methane can be nullified at no cost to the companies which is equal to shutdown of two thirds of coal-burning power plants in Asia.

“If they make the three homework in front of time, we will definitely see a bright future of gas,” said Birol.

Global gas markets are entering a new year by a lot of gas coming from the United States and Australia. Around 2023, there will be three big champions of LNG exporters for around 100 billion cubic meters of LNG from Qatar, the US and Australia. This is a big advantage for Asian buyers and they can make their best choices there, he added.

“In my view, it’s good for Asian importers of LNG to seek diverse sources of supply to meet their growing demand,” Birol told Xinhua.

Last year, global gas consumption increased 130 billion cubic meters, the highest ever in recent years. And this is mainly driven by China. “In the next five years, we will see golden years of natural gas for China,” said Birol.

“Import of natural gas doesn’t necessarily mean a risk for gas security. As long as diversity of supply is maintained, I don’t think it would create a problem for Chinese gas security,” said Birol.

China imported 92 billion cubic meters or 68.71 million tonnes of natural gas in 2017 up 27 percent year on year and Chinese dependence on imported gas would top 40 percent soon.

The IEA and Chinese Ministry of Ecology and Environment (MEE) signed a memorandum of understanding on Monday to help China to develop different technologies on wind, solar, natural gas energy efficiency and others.

“We have rich experience in energy decision making in these areas and we are going to support Chinese government to reduce air pollution and to decarbonize the energy sector by sharing experiences with China. I think this MOU is a milestone between IEA and China in terms of supporting China for case of clean air for its citizens,” said Birol (by Liu Yanan, Liu Xiaoyun and Sheng Qin, liuyn@xinhua.org)


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