Washington — US and Japanese governments and industry are stepping up collaboration to lay the groundwork for natural gas markets and LNG infrastructure in the Indo-Pacific region, officials said at a Japanese Embassy event in Washington Wednesday evening.
Efforts already underway include the Trump administration's "Asia-EDGE" initiative announced July 30 by Secretary of State Mike Pompeo, entailing $50 million in investment this year to help Indo-Pacific partners import, store and deploy energy resources.
The heightened focus on the Indo-Pacific region is seen as helping counterbalance China's footprint in infrastructure development -- with the benefit of helping expand the market for US LNG exports from Southeast Asia to South Asia.
"The great thing with this LNG boom that we have [is], we can finance the facilities at the other end to take gas in," Ray Washburne, president and CEO of the US Overseas Private Investment Corporation, said Wednesday.
Total LNG demand in the Asia Pacific region is expected to grow to 50.9 Bcf/d by 2024, a 23.3 Bcf/d (84%) increase over 2017 levels, and the region is expected to account for more than 70% of global LNG demand growth over that period, according to S&P Global Platts Analytics.
Washburne made a pitch for getting legislation, known as the BUILD Act (S.2463, H.R.5015), across the Congressional finish line this year. The bill would create a US International Development Finance Corporation, a successor to OPIC, with the ability to acquire equity as a minority investor in projects. It would allow OPIC to double the amount it puts out from $30 billion to $60 billion, and to conduct feasibility studies, he said.
Representative Ted Yoho, Republican-Florida, said the legislation, which he authored in the House, would enable partnerships with entities such as the Japan Bank of International Cooperation, and would advance private sector-led development. He emphasized its ability to help counter China's Belt and Road Initiative, which he criticized as "nothing more than a predatory loan scheme that indentures nations to China."
The BUILD Act has passed the House unanimously, cleared the Senate Foreign Relations Committee and is awaiting Senate floor action this fall, he noted. "We're just waiting for a little bit of help from a couple senators," Yoho said.
Steven Winberg, DOE assistant secretary of energy for fossil energy, said his agency is committed to deepening its work with Japan's Ministry of Economy, Trade and Industry (METI) and to promote US LNG exports and greater LNG use in Southeast Asia and South Asia.
"This administration is committed to energy policy that maximizes the reach of American energy resources abroad," Winberg said.
An important component of that is identifying opportunities to expand the LNG market in the Indo-Pacific region, he said. US and Japanese officials will be discussing that this week, as well as at an upcoming LNG producer-consumer conference in Japan, he added.
The US and Japan in November 2017 launched the Japan US Strategic Energy Partnership, pledging to cooperate on promoting advanced nuclear technologies, coal technologies, global gas and energy infrastructure, and designating Southeast Asia, South Asia and Sub-Saharan Africa as important regions. As part of that effort, the two countries signed an MOU on developing energy infrastructure in other countries.
Shin Hosaka, METI deputy commissioner of the agency for natural resources and energy, said energy security in Asia is directly linked to energy security in Japan, the largest importer of LNG to date. Development of a market in Asia will mean more supplies available to Japan at times of emergency and more reasonable prices due to competition, he said. US and Japanese cooperation is important because of the potential to supply stable, flexible energy to Asia, he said.
Frank Fannon, assistant secretary of the Bureau of Energy Resources, said the Indo-Pacific region will be a key source of global energy demand growth to 2040. The goal of the Asia-EDGE initiative is to foster diversified energy sources, transparent trade and investment practices, and open, competitive markets to ensure resilient, widely available energy to meet demand, he said.