Sept. 27 (UPI) -- After 50 years, the Association of Southeast Asian Nations need to coordinate on energy issues and consider LNG as a basis for cooperation, analysis finds.
The ten Southeast Asian states that make up the bloc combine for $2.8 trillion in gross domestic product, which if united would make it the sixth largest economy in the world. As of this year, it had 208 gigawatts of power capacity installed and needs more than twice that much by 2035 to keep up with demand.
"We estimate around $500 billion investments will be needed to build the much needed power capacity," Edi Saputra, a regional gas and power analyst at consultant group Wood Mackenzie, said in an emailed report. "With the region lacking the internal capital, it becomes a strong magnet for foreign direct investments."
The pace of development in Southeast Asia means electricity consumption is on pace to grow by more than 8 percent each year for at least the next 10 years and the emerging economies in the region are searching for new ways to access power. In Myanmar, only about 30 percent of the country's rural population has access to a reliable source of energy and the government needs to build up the grid for 40,000 villages to meet its goal.
Wood Mackenzie said it would be liquefied natural gas that could facilitate the type of cooperation needed to keep the ASEAN relative after 50 years. While there are emerging bilateral pipeline connections, Saputra said the region needs to play catch up.
"LNG has changed the regional gas landscape, exposing ASEAN to the global LNG dynamics," he said. "ASEAN needs to shift its focus towards LNG cooperation, in building virtual pipeline interconnections, instead of dwelling on the uncertain initiative."
Wood Mackenzie estimates regional demand for LNG to triple within the next 10 years.
Singapore-listed KrisEnergy in August signed documents outlining plans to develop the Aspara area in the Cambodian waters of the Gulf of Thailand. The company said the oil deposits in the concession area are small, spread out and may require significant investments and a long-term commitment to develop fully. Vietnam and Myanmar already enjoy offshore reserves, though Cambodian waters are relatively untested.
The region in question could hold as much as 50 million barrels of reserves.