Exhibition & Conference

8-10 September 2020 | Singapore EXPO, Singapore

Strategic Programme

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Go Katayama

Senior LNG and Natural Gas Consultant

Poten & Partners


09:30 - 09:55

Wednesday, 18 September 2019

S2.3 What Does the Paris Accord Mean for the LNG Industry?

  1. Objective/Scope

In this paper, Poten will discuss the implications of Paris Accord for the LNG industry, focusing on the dozen countries that are forecasted to make up nearly 80% of the world’s LNG demand in 2030 under our base case.  We will estimate CO2 emissions under our base case country forecasts and compare them to their Paris Accord targets.  We will assess their plans to meet their targets and identify and discuss the implications for the LNG industry if they do so.  Finally, we will identify options for the LNG industry to mitigate the risks of being displaced from these countries’ energy mix due as a result of greenhouse gas mitigation policy.

 

  1. Methods, Procedures, Process

We will utilize Poten’s proprietary country-level energy forecasting models to project a base case to 2030 and estimate CO2 emissions consistent with our base case, for the following countries: Japan, China, Korea, India, Taiwan, Spain, UK, Thailand, Pakistan, France, Indonesia, and Singapore.  We will analyze publicly available information regarding the Paris Accord targets and emissions reductions plans for these countries. We will analyze the gaps between our forecasts and their plans and assess both the realism of the plans and the risk to local LNG industry development.

 

  1. Results

We find both winners and losers for LNG in the dozen critical countries.  Where the country is already heavily reliant on gas, the environmental lobby is strong, and/or conditions for renewable power generation are exceptionally favorable, meeting Paris Accord targets will be bad for LNG.  Where the opposite conditions prevail, LNG will prospect.  The overall result of full compliance would be a world that diverges sharply from our base case.

 

  1. Observations

The future evolution of the energy balance in these countries will be affected by the development of renewables technology, including battery storage technologies. 

Greenhouse gas emissions occur along the LNG value chain and vary widely depending on the specific value chain and infrastructure used.

We will broadly assess the sensitivity of our analytical results to potential technology breakthroughs and to concerted efforts to reduce LNG-related emissions.

 

  1. Conclusions

Absent technological breakthroughs, many of the countries in our critical dozen will struggle to meet their Paris Accord commitments. LNG industry stakeholders and environmental policy makers alike should consider how to best position LNG to be part of what will likely be an imperfect solution.