Minister Iswaran cutting the ribbon for the opening of Gastech 2015
By Muhammad Suhaimi
Volatile natural gas markets and stronger calls for lower carbon emissions challenge the industry to make fundamental changes in how it operates, Helge Lund, chief executive officer of Britain’s BG Group, said in his keynote address on Tuesday at Gastech 2015.
“Business as usual is not anymore an option,” Lund said. “The weak oil price environment actually makes it easier to drive the scale of the change that is required.”
The challenging situation has revealed that more must be done to improve the cost efficiency of today’s gas business models, he said at Gastech, a partner event to Singapore International Energy Week 2015.
Gas companies must deliver returns to investors irrespective of the volatility in oil prices and there must be a sustained effort to lower the cost of production and tighten efficiency and productivity, Lund said. Companies must also be willing to continue investing in the business, even through difficult times, he added.
Beyond investing in innovation to overcome challenges efficiently, companies should also look for marginal improvements that can produce significant benefits, Lund said, noting that standardisation in technical procedures and equipment across the industry could streamline operations and reduce the costs of components.
Lund also highlighted several positive developments for the gas industry in the medium to long term. The impending introduction of U.S. liquefied natural gas (LNG) into the global market will add more flexibility and reliability in supply, he said.
With LNG accounting for only 5% of China’s fuel mix today, coupled with mounting pressure for better air quality, there are clear indications for strong growth in gas demand in China, Lund said.
The emergence of LNG as a transport fuel for the marine industry and growth of LNG trucking activities globally have created new markets and introduced more diversification and security in gas demand, he said.
“This is not, as our critcics may describe, a twilight industry but one I believe that continues to develop and provide the answers to key global economic and societal challenges,” Lund said.
About Singapore International Energy Week (SIEW)
In its 8th edition, Singapore International Energy Week is the premier platform in Asia for energy insights, partnerships and dialogue, bringing together the world’s leading conferences, exhibitions and roundtables in one week and one location. SIEW enriches the global energy conversation by convening political, business, academic and energy industry thought-leaders to define and advance the world’s energy challenges, solutions and actions across the spectrum of oil and gas, clean and renewable energy, and energy infrastructure financing.
Please visit www.siew.gov.sg for more information.
About the Energy Market Authority
The Energy Market Authority (EMA) is a statutory board under Singapore’s Ministry of Trade and Industry. Our main goals are to ensure a reliable and secure energy supply, promote effective competition in the energy market and develop a dynamic energy sector in Singapore. Through our work, we seek to forge a progressive energy landscape for sustained growth.
Please visit www.ema.gov.sg for more information.