Some of the world’s biggest heavyweights in liquefied natural gas exports are interested in adding Cambodia to their client list as the Southeast Asian nation build sits first LNG-fueled power station.
The United States, Australia, Canada, and some Southeast Asian countries are among those interested in supplying fuel for the new power plant, Cambodia’s energy minister, Keo Rottanak, told Bloomberg in an interview.
Cambodia gets 63% of its electricity from renewable sources, according to Bloomberg, but according to the International Energy Agency, the country generates over 50% of its energy from hydrocarbons, including coal, oil, and oil products. Hydropower provides 4.6% of the total, and biofuels and waste account for 28.7% of power generation. Solar and wind make up a tiny portion of power generation. In terms of domestic energy generation, Cambodia has one of the cleanest mixes, with hydropower and biofuels accounting for most of the total.
According to Rottanak, liquefied natural gas is a diversification tool for Cambodia, which is why the government is building the 900-MW power plant that LNG exporters are interested in supplying the fuel for.
Over the longer term, LNG makes perfect sense, but right now, the Asian prices for the commodity are so high that not every nation can afford it with ease. Earlier this month, the benchmark Japan-Korea Marker surged to over $21 per million British thermal units on renewed fighting in the Persian Gulf. More recently, LNG prices got support from Qatar Energy’s announcement it would extend the force majeure on Ras Laffan until the middle of October.
The Middle East disruption in LNG flows has been an opportunity for other LNG exporters, and with a lot of new capacity coming on stream in the next few years, securing new clients is the obvious thing to do, especially for U.S. LNG producers as most of the new capacity will be launching in the United States, intensifying competition.
By Irina Slav for Oilprice.com
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