Asian Energy and Environmental Challenges in Era of Globalization: The Case of LNG

Abstract

In a context marked by tensions on energy markets (oil and gas in particular) and the constant rise of environmental concerns, several Asian countries are exploring the most promising ways to reconcile economic growth, energy consumption and respect for the environment in a globalized world. Liquefied natural gas (LNG) has emerged as the most appropriate energy to meet environmental criteria due to its multiple advantages: cleanliness, energy efficiency, cost competitiveness and flexibility. As a partner in renewable energies, it is the energy of the future that will play a decisive role in the energy transition. LNG growth is due to technological innovations in the shipping industry. The purpose of this chapter is to discuss the issue of environmental and energy challenges in the era of globalization in the Asian region. Hence, this chapter consists of four main sections. The first section highlights the recent trends in the LNG industry which have led to the emergence of new techniques, new processes and new markets. Recent developments in LNG markets have also been discussed in this section with a special focus on the “Big 5” Asian buyers. The second and most important section describes the key commercial aspects of LNG, namely LNG pricing, LNG contracts and contract renegotiation, particularly in the new context of US LNG exports. The third section focuses on the issue of globalization of LNG markets and contributes to current affairs debate on the creation of an LNG trading hub in Asia. The fourth and last section is devoted to the environmental aspects of LNG use and to discuss the intentions of the main importing countries for an energy mix in favour of LNG and other less polluting (renewable) energy. Due to data constraints, we favour the descriptive approach—this approach is nowadays neglected—which constitutes a solid basis for further research.