Southeast Asia's net oil imports will more than double by 2035, costing USD 240 billion at today's prices, to meet strong energy demand growth to fuel the region's fast-growing economies, the International Energy Agency (IEA) said on Wednesday.
Singapore: Southeast Asia's net oil imports will more than double by 2035, costing USD 240 billion at today's prices, to meet strong energy demand growth to fuel the region's fast-growing economies, the International Energy Agency (IEA) said on Wednesday.
The IEA, which coordinates energy policy for developed economies, said Southeast Asia's net oil imports will rise to more than 5 million barrels per day (bpd), up from a current 1.9 million bpd, just behind the European Union, India and China.
The 10 countries in the Association of Southeast Asian Nations (ASEAN) will join China and India in making Asia the world's global energy demand growth centre as per-capita energy use of Southeast Asia's 600 million inhabitants is still very low, at just half of the global average, it added.
"Southeast Asia faces sharply increasing reliance on oil imports, which will impose high costs and leave it more vulnerable to potential disruptions," the IEA said in a release about its special report, Southeast Asia Energy Outlook.
Indonesia and Thailand will lead energy demand in the region, with their net oil import bills tripling to nearly USD 70 billion each by 2035, the IEA said.
Fuel subsidies, which cost the region USD 51 billion in 2012, will continue to be a key factor in distorting energy markets, the agency added.
Southeast Asia's total energy demand is expected to rise by more than 80 percent by 2035 to support a near tripling of the region's economy and a population that will expand by almost a quarter, the agency said.
This includes a rise in oil consumption to 6.8 million bpd from the current 4.4 million bpd and a tripling of coal demand over 2011-2035.
The power sector, which will need to attract about USD 1 trillion of investment, will be a key driver of spending on energy-related infrastructure.
Coal will be the biggest winner in the region's energy mix as it will generate nearly half of Southeast Asia's electricity by 2035, up from less than a third today, the IEA said. This will contribute to a doubling of the region's energy-related carbon dioxide emissions reaching 2.3 gigatonnes by 2035.
Coal demand in Southeast Asia could fall by a fifth if its coal-fired plants were as efficient as those in Japan today, the agency said.
For natural gas, the region's demand will increase by 80 percent to 250 billion cubic metres (bcm) by 2035, the IEA said.
As its energy demand increases, Southeast Asia will have less natural gas and coal for export.
Key gas producers in the region - Indonesia, Malaysia, Myanmar and Brunei - will cut net exports to 14 bcm in 2035, down from the current 62 bcm.
The IEA forecast that Indonesia would remain the top exporter of thermal coal.