The document summarizes key discussions from the 4th Annual Asia Pacific Small & Mid-Scale LNG Forum held in Singapore in 2015. It discusses how the Asia Pacific region is well-suited for small and mid-scale LNG developments given its diverse geography and energy needs. Specific topics covered include the impact of lower oil prices on LNG, challenges in unlocking stranded gas resources, Indonesia and the Philippines emerging as major small-scale LNG markets, and transport and power generation opportunities for small-scale LNG.

1. POST EVENT
EXECUTIVE
SUMMARY
Written by
Paul Lim
Editor
TPS
Produced by: A dmg :: information company
Organised by

2. The Asia Pacific region holds much promise for
small and mid-scale liquefied natural gas (LNG)
developments, given the geographical diversity,
and the various stages of developments of the
economies in the region. In contrast, large-scale
LNG infrastructure may not be economically-sound
due to the region’s widely interspersed, small and
stranded demand centers.
The Asia Pacific region is marked by a number of
characteristics:
1. Some parts lack comprehensive gas and power
distribution networks;
2. Gas production is far from consumption centers;
3. There are limited economical hydroelectric
power solutions;
4. Energy demand is expected to grow strongly.
Demand for natural gas in Asia Pacific is expected
to grow by 250 billion cubic meters (bcm) between
2014 and 2020, with demand expected to reach
790 bcm in 2015. Demand for LNG is expected to
track these increases, where growing economies
like Indonesia and the Philippines, will be major
contributors to the rise in natural gas consumption.
A focus on energy security by countries looking to
diversify their energy mix will also see more demand
for LNG.
Meanwhile, the establishment of infrastructure,
trading and services hubs in countries like Singapore
will contribute to the scope and liquidity of the LNG
market in the region.
dmg :: events, organisers of Gastech and ADIPEC, held the 4th Annual Asia Pacific Small & Mid-Scale LNG
(APAC LNG) Forum from 13 to 15 May in Singapore. Over 120 international and regional practitioners and
experts gathered to share their insights and discuss the trends and challenges in shaping the future of Asia’s
small-mid LNG landscape.
EXECUTIVE SUMMARY
ASIA PACIFIC SMALL & MID-SCALE LNG FORUM 2015
PAGE 2
ASIA RIPE FOR SMALL AND MID-SCALE LNG DEVELOPMENTS
Detailed themes from the conference
1. The impact of lower oil prices on gas and LNG prices 3
2. Challenges of unlocking stranded gas 3
3. Up-and-coming players in Southeast Asia 4
4. Best solutions for on and offshore LNG transport 7
5. Small and mid-scale players’ entry into the LNG market 8
6. Small and mid-scale LNG for power generation 8
This report has been produced by dmg :: events and TPS. All of the
following are the writer’s personal comments and understanding of
the presentations and panel discussions at the APAC LNG Forum.
The writer accepts no liability for any reliance placed upon the
above by any person whatsoever, neither does it constitute any
recommendation for business purposes.
If you have any feedback on this report or require further
information, please contact Samantha Ling at
samanthaling@dmgevents.com or call +44 (0) 203 772 6087.
Registered office: Northcliffe House, 2 Derry Street, London,
W8 5TT | Registered in England & Wales: Company no. 2246951
VAT number: GB 494 1614 3
Registered Office in Singapore: 19 Cecil Street, #03-01,
The Quadrant, Singapore 049704

3. 1) The impact of lower oil prices
on gas and LNG prices
Falling crude oil prices since Q4 2014 has seen
an estimated fall in LNG Delivered Ex-Ship (DES)
prices by $4.00/MMBtu, to $11.10/MMBtu. The lower
crude prices have also put a temporary brake on
interests in LNG projects, with customers shying
away from entering into final investment decisions.
But common agreement that crude will continue on
a gentle upward climb will see LNG regaining much
of its relevance in time to come.
However, the impetus remains to build a cost-
effective LNG supply chain to drive down costs
further so that small and mid-scale LNG players
can still maintain sufficient margins to switch
over from liquid petroleum. According to energy
consultants Galway Group, the current low crude
oil price has lowered the profit margin for using
natural gas slightly. However, this also means that
the cost of using LNG as feedstock is also lower,
thus benefitting small and medium-sized projects.
Based on a Brent crude price of $60/b and a liquid
fuel cost of $18/MMBtu, the profit margins for
natural gas producers were lowered slightly by 3%
to $6.84/MMBTU, Galway Group said, compared
to $7.03/MMBtu when Brent crude was at $100/
b and liquid fuel at $23/MMBtu. There remains a
substantial upside to using LNG as a substitute for
fuel, especially when coupled with reductions of up
to 80% in capital costs for small and mid-scale LNG
projects compared to large-scale ones.
Economic and environmental benefits of using
LNG will still drive the development of this industry.
More gas extraction projects coming online in North
America and Asia Pacific by the end of the decade
will increase global LNG supply and possibly drive
prices down further.
2) Challenges of unlocking
stranded gas in Asia Pacific
Many mature gas fields have been thoroughly
probed and unlocked, but there still remains
stranded gas fields in the Asia Pacific region
which have not been fully explored. Players
seeking to monetize stranded gas will face
technical and social challenges.
Many stranded gas fields are located where access
is very much limited by climate and geography of
the area, distance from the market and availability
of dedicated infrastructure.
For instance, to access stranded gas in shallow
waters, dedicated shallow-draft vessels with higher
levels of manoeuvrability are needed, but largely
lacking.
There will be a need to build an entirely new supply
chain, including greenfield infrastructure in locations
where there are no dedicated gas pipelines or
overland transport routes like roads or highways.
There will also be a need for on-site power sources
to operate small and mid-sized LNG projects.
Inclement weather can inhibit access to stranded gas
fields, as well as delay exploration and production
works. A workforce will need to be extremely
dedicated and compensated appropriately for
irregular working conditions.
Other issues include social and environmental
disruption. Indigenous inhabitants at stranded gas
locations may not welcome disruptions to their
traditional way of life. For example, aborigines in
British Columbia have not consented to LNG exports
from the port city of Prince Rupert. There can also
be stringent governmental regulations which reduce
the number of options available for transportation
and sales of natural gas.
While these obstacles can seem daunting at first,
players will reap long-term returns if they can
mitigate these issues upfront.
ASIA PACIFIC SMALL & MID-SCALE LNG FORUM 2015
PAGE 3

4. Southeast Asia is expected to increase its demand
for fossil fuels by about 4% annually as energy
consumption increases due to economic and
population growths. The unique geographical make-
up of the region also calls for unique small and
mid-scale LNG solutions to feed scattered demand
centers. There is also a lack of an established gas
pipeline infrastructure.
Southeast Asian governments and utility companies
are now more sensitive to fuel oil prices, and are
working to diversify their energy mix. Among
them, Indonesia and the Philippines will be among
the biggest markets for small and mid-scale LNG
developments, given their archipelagic make-up and
energy demand.
ASIA PACIFIC SMALL & MID-SCALE LNG FORUM 2015
PAGE 4
The Philippines requires a huge amount of
energy to sustain its growing economy and high
population growth rate of 2% a year - about 2
million people are added to its population each
year.
About 40% of electricity supplied to high
population density areas like Luzon is from
natural gas, yet natural gas makes up just 8% of
its energy mix presently. The Philippines’ sole
gas field, Malampaya in northwest Palawan, is
expected to be depleted by 2024. Small oil and
gas fields will be depleted within five and seven
years. Gas is seen as the “greenest” fossil fuel
around compared with coal, which is regarded
as an unacceptable alternative.
It will face huge demand for energy in the future
for both power and transport. Other than the
need to import LNG from other sources, it will
also need economically-efficient, small-sized gas
plants to feed its power stations. Small and mid-
scale LNG facilities are thus ideal for feeding the
Philippines’ expected spurt in energy demand.
The Philippines National Oil Company is looking
at LNG very closely, and plans to increase its
usage in power generation. It will concentrate on
small and mid-scale LNG projects and security
LNG supply, while pushing forward the Batangas
to Manila (BatMan) gas pipeline.
SPOTLIGHT: THE PHILIPPINES
3) Up-and-coming players in Southeast Asia

5. Gas production has dominated since 2001, with
oil on a steady downward decline of between
2-12% between 1995 and 2012. Oil has only started
a slow revival from 2013 while gas utilization has
continued on a gentle upward trend since 2003.
Domestic natural gas usage has increased 35%
to 4,560 billion Btu per day (BBtu/d) in 2014,
up from 3,379 BBtu/d in 2010. Domestic usage
volumes exceeded export volumes in 2013, with
domestic consumption taking up 3,774 BBtu/d of
natural gas, compared to exports of 3,402 BBtu/d.
Indonesia will need LNG imports to meet
domestic demand. It is projected to start
facing gas shortages by 2018; it could also start
becoming a net gas importer by 2024. The
country has a diverse geographical makeup –
Indonesia is made up of numerous small islands
with stranded demand centers more than 400
miles away from supply sources. These demand
centers include power and mining industries
in the north and east of the country. Small and
mid-scale LNG is well-suited to meet its needs,
perhaps even going as far as to replace the
traditional fossil fuels used in long-haul trucking,
coal trucking, and passenger ferries.
Major Indonesian firms such as Humpuss LNG
and PGN LNG are continually working to enhance
their gas and LNG capabilities in preparation for
these new demands.
SPOTLIGHT: INDONESIA
ASIA PACIFIC SMALL & MID-SCALE LNG FORUM 2015
PAGE 5
THAILAND
CAMBODIA
VIETNAM
PHILIPPINES
Tangguh
Abadi FLNG
Donggi-Senoro
Sengkang
Flores
Papua
Seram
Sulawesi
Sumbawa
Pasuruan
Ball
Lombok
SuranayaJava
West Java
Natuna
Senipah
Kalimantan
Jurong Isl.
Sumatra
Dumal
Arun
NATUNA SEA
GULF OF
THAILAND
SOUTH CHINA
SEA
CELEBES SEA
MOLUCCA SEA
BANDA SEA
JAVA SEA
Existing gas pipeline
Planned or under construction gas pipeline
Gas production area
LNG liquifaction plant
Planned/under const. LNG liquifaction plant
LNG regasification terminal
Planned/under contr. LNG regasification terminal
PA C I F I C O C E A N
I N D I A N
O C E A N
EAST TIMOR
BRUNEI
Bontang
Senipah
JAKARTA
SINGAPORE
M A L A Y S I A
Natural gas infrastructure map
Based on IEA data from the ENERGY SUPPLY SECURITY Emergency Response of partner countries 2014 Indonesia © OECD/IEA 2014, IEA
Publishing; modified by dmg :: events. Licence: https://www.iea.org/t&c/termsandconditions/
3) Up-and-coming players in Southeast Asia

6. 120
100
80
60
40
20
0
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
2015
2018
2021
2024
2027
Potential supply forecast
Projected supply forecast
BCMperyearr
Existing supply forecast
Indigenous production
Natural gas production (1970-2012) and projection (2013-2028)
ASIA PACIFIC SMALL & MID-SCALE LNG FORUM 2015
PAGE 6
Based on IEA data from the ENERGY SUPPLY SECURITY Emergency Response of partner countries 2014 Indonesia © OECD/IEA 2014, IEA
Publishing; modified by dmg :: events. Licence: https://www.iea.org/t&c/termsandconditions/
3) Up-and-coming players in Southeast Asia

7. ASIA PACIFIC SMALL & MID-SCALE LNG FORUM 2015
4) Transport: Best solutions for
on and offshore LNG transport
With small and mid-scale LNG developments comes
a need for more advanced models of transportation.
These models will come into play after bulk import
LNG cargoes are broken down into smaller-sized
cargoes for distribution. A “spoke-and-hub” system
forms the basis for these models.
In Asia Pacific, both the on-shore and off-shore
transport solutions are ideal, depending on location
and geographical makeup of the market.
On-shore distribution is efficient in bringing LNG
resources to places where there is short supply. Such
distribution, including trucking and railway, does not
require advanced technology. It is also reliable and
requires less capital and operational expenditure,
and has a smaller footprint on the environment. Less
equipment is needed for such models and transport
vehicles can be re-directed easily to other locations.
Lesser time can be spent on construction and
execution, especially if modular systems are used.
Off-shore solutions such as modular systems or
dedicated tankers are also ideal for small and mid-
scale LNG. They can move flexibly to multiple
locations and reach stranded and smaller gas fields.
Floating LNG (FLNG) platforms optimized for small
and mid-scale projects is especially applicable to
Asia Pacific, as it is ideally suited for the diverse
scopes and geographical diversity in the region.
It also combines liquefaction and distribution
capabilities to serve end-users in an economical way.
Dedicated tankers for “milk runs” to distribute LNG
throughout a smaller geographical area, or ships
with built-in ISO-tanks can also be part of offshore
distribution solutions. These vessels have leaner
crew strength and require less maintenance and
ports of call to operate.
PAGE 7

8. ASIA PACIFIC SMALL & MID-SCALE LNG FORUM 2015
5) Small and mid-scale players’
entry into the LNG market
The majority of the LNG deals signed in the last five
years have been mainly among big players such as
the oil supermajors and big utilities firms.
But now, with an increase in LNG production in
Indonesia, Australia and the United States, the
market will see more supply liquidity which in turn,
may keep LNG prices depressed. Lower LNG prices
can be considered a boon for small and mid-sized
players, allowing them to access markets with lower
levels of credit.
Increase in supply and access to cheap credit have
given rise to new small and mid-sized buyers such
as those in Pakistan and the Philippines, and small
utilities in China. These players can buy LNG in
smaller volumes for use as bunker fuel and power
plants. There are also new import markets in Egypt
and Jordan. These buyers will be attractive to mid-
sized sellers, who can sell of smaller quantities which
major players may not be interested in.
But economies of scale still affect smaller and mid-
sized players. They may feel the cost squeeze,
especially when alternative fuels like coal and
petroleum are still proving to be cost-competitive.
In the meantime, a liquid LNG market may still
eventually emerge, once there are sufficient buyers
and sellers in the market and new supply continues
to come online. Smaller players may also have lesser
ability to participant in capital-intensive projects or
invest in new technologies to convert incumbent
facilities to take in natural gas.
6) Small and mid-scale LNG for
power generation
Falling LNG prices have increased the business case
for small and medium-sized power plants taking in
natural gas as feedstock.
Lower terminal effect on gas prices can incur sizable
improvements in operating costs, with lower FOB
prices reducing the overall terminal effect. Other
than the cost factor, greenfield LNG plants with
natural-gas fired boilers can supersede fuel oil-based
power plants in terms of reliability and efficiency.
Due to the smaller scale of the regasification set up,
there is no need for additional maritime or offshore
construction works. Power plant operators can
continue to use existing harbor facilities.
However, power plant operators must take into
account set-up, maintenance and operations costs.
They must also be aware of the consumption rate
of LNG, depending on the capacity factor as it will
affect their LNG refill intervals. In addition, they need
to maintain a “safe” level of inventories which can
last about seven days.
PAGE 8

9. The next decade promises exciting opportunities for small and mid-scale LNG industry players in Asia
Pacific. Global gas markets are on the verge of new transformation, and the region is well-poised to
benefit from these changes. Not every player will take the same route and this will be what makes the
regional LNG market dynamic and vibrant.
As the region’s economic growth continues, and governments look to natural gas as the best candidate
for alternative fuels in the future, LNG developments will continue to grow. Small and mid-scale players
will ride on this boom, especially as big-scale projects mature and settle down into a steady rhythm.
They will sketch out previously unmapped opportunities and engage with super majors and utilities
firm to meet a new kind of market demand.
Infrastructure, services and trading hubs will become more established in the region, and with them,
liquidity for spot trading and arbitrage opportunities will increase.
CONCLUDING REMARKS
ASIA PACIFIC SMALL & MID-SCALE LNG FORUM 2015
ABOUT THE WRITER
Paul Lim, Editor – The Petrochemical Standard
ABOUT THE PETROCHEMICAL
STANDARD (TPS)
Paul Lim has been with The Petrochemical Standard
since its first year of inception. His interest and
experience in LNG are examining global trade
flows and discovering new patterns in unmapped,
emerging markets.
He has held a variety of senior editorial positions
with various business and commodity publications,
and presented at international conferences. He
has also written academic papers on energy and
political economy.
He holds a Master of Science degree in Political
Economy from the S. Rajaratnam School of
International Studies, with a focus on energy
security and political risks.
LNG has always played an important role in the
world of petrochemicals. With the resurgence in
shale gas production, connecting the LNG dot
to petrochemicals becomes even more vital. The
Petrochemical Standard’s coverage of this vital
link aims to assist industry players to understand
the state of play between gas feedstocks and
downstream liquid products.
TPS is a global price assessment and analysis
agency set up by a team of pricing veterans in
Q4 2013. Its primary focus is assessing the prices
of major petrochemicals and feedstocks by tying
the trading information to market fundamentals.
TPS provides vital analysis of these markets by
leveraging its experience and market expertise with
proprietary data.
TPS editorial offices in Singapore, London and
Houston also provide bespoke analytical services
as well as in-depth studies and market trends on
various commodities.
PAGE 9