Interview with Mangesh Pantankar, Head of Business Development – Asia Pacific, Galway Group

Deregulation is likely to have limited impact on long-term LNG demand. However, deregulation is creating uncertainty for the gas aggregators in the short-to-medium term, in relation to the market share they can secure. This will negatively impact investment decisions, which will have a knock-on effect of dampening demand growth.

1. What will be the impact of deregulations on LNG demand in Japan, Korea etc.?

Deregulation is likely to have limited impact on long-term LNG demand. However, deregulation is creating uncertainty for the gas aggregators in the short-to-medium term, in relation to the market share they can secure. This will negatively impact investment decisions, which will have a knock-on effect of dampening demand growth.

2. Aside from the more mature markets, where will the potential future LNG demand growth come from and why?

Besides China and India, the key contributors to Asian LNG demand growth by 2025 will be Thailand (led by declining
Gulf of Thailand production), Singapore (driven by expiry of piped gas contracts), Pakistan (driven by economic
growth and fuel replacement), Bangladesh (driven by declining domestic production) and Philippines (driven by
declining domestic production). Whilst Indonesia will consume incremental LNG volumes in the gas deficit regions,
new contracts for LNG supply are more likely to come from domestic projects as opposed to global liquefaction
plants.

3. Which trends and innovations are you seeing on the supplier side, to help develop demand?

Suppliers and traders are showing increasing interest to invest in the downstream value chain, to stimulate demand.
Additionally, they are relaxing their requirements relating to the credit-worthiness and financial standing of the
buyers, in order to ensure that the deals move forward and demand grows.

4. What is the future of small-scale development in Asia Pacific and what is the approximate timeline for growth?

The small-scale LNG regas industry (< 2 MTPA) is poised for a bright future and several projects are making progress
in the right direction. The industry received a further boost this year, when the small-scale floating regas project in Bali was commissioned. The industry stakeholders are clearly demonstrating the required behaviours to promote
small-scale developments e.g. LNG suppliers & traders are willing to sell volumes to small buyers, shipowners are
willing to invest in floating regas solutions, lenders are considering innovative structures to arrange finance etc.
However, it needs to be noted that small—scale LNG involves development of significant infrastructure across the
region and will take time to make its impact being felt. We believe that several such projects will get commissioned
over the coming years and the aggregate demand has potential to reach 10-15 MTPA by 2025.

5. Europe is leading in bunkering; do you think there are any lessons learned to help fast track the LNG bunker
business in Singapore?

LNG bunker business (i.e. use of LNG to fuel ships) will need the necessary regulatory support (e.g. development of
ECA’s) and regional co-operation (e.g. EU is supporting the funding of several studies and project development for
promoting LNG bunkering) to flourish in Asia. Whilst Singapore is taking the necessary steps to become the LNG
bunkering hub in Asia, it may be useful to increase regional engagement and ensure that majority of the countries are
onboard & are taking the necessary eorts to transition from liquid fuels to gas.

6. What is Galway hoping to get out of sponsoring the CWC’s World LNG Summit this year?

LNG is moving from an “oligopoly” to “competitive market”, given new players are entering the industry (new
suppliers and buyers, new set of financiers). CWC’s World LNG Summit is one of the leading events for our industry and we are hoping to meet & discuss developments with not only the established players but also the new corporates
entering the game.

© The CWC Group 2017