The president and CEO of Aramco says Asia’s priorities, like that of the Global South, are being ignored by the developed markets as they push ahead with the energy transition.
This is despite Asia accounting for “almost half” the world’s GDP as well as half the world’s population, says Amin Nasser, head of Saudi Arabia’s state-owned oil giant.
“This year alone, Asia is likely to contribute roughly 60% of the global economy growth and Asia consumes more than half of global energy supplies. Crucially, 84% of the consumption is still supplied by conventional energy. In short, Asia is vital to the global economy, our shared climate ambition and the hopes and dreams of billions of people.”
Speaking at the Singapore International Energy Week (SIEW) 2024 on Oct 21, Nasser says Asia’s progress on the energy transition is “far slower, far less equitable and more complicated than many [have] expected”.
“This may be Asia’s century, but Asia’s voice and priorities — like those of the broader Global South — are hard to see in the current transition planning, and the whole world is feeling the consequences,” says Nasser.
He even bookended his 14-minute speech by invoking Singapore’s founding prime minister, Lee Kuan Yew, alluding to the late politician’s pragmatic approach to nation-building.
See also: Aramco CEO invokes Lee Kuan Yew, calls for Asia to have greater say in climate policy
Nasser adds: “[Asia’s populace] hunger for something that connects the passion for the net-zero future we all want with a reality we can all afford and a relentless focus on what works. This was Mr Lee Kuan Yew’s mindset, and I believe it would change ‘mission impossible’ into ‘mission possible’.”
Aramco is the sole “SIEW Diamond Sponsor” at this year’s conference, which appears to be the highest tier offered by the organiser, the Energy Market Authority (EMA).
See also: S’pore grants conditional approval to Sun Cable to import 1.75GW of low-carbon power from Australia
In addition to an exhibit located in the centre of the conference venue on opening day, Aramco received top billing among sponsors — above “SIEW Gold Sponsor” DBS Bank and partner event sponsors Sarawak Energy, Sembcorp Industries U96 and SP Group.
Aramco last sponsored SIEW in 2022, when the oil giant was named “Singapore Energy Summit Keynote Sponsor”. However, Aramco did not send a representative to speak at that year’s conference. The sole “SIEW Platinum Sponsor” that year — the only name above Aramco — was Australian solar project developer Sun Cable.
The biggest sponsor at last year’s edition of SIEW was French oil major TotalEnergies, which was named “SIEW Multi-Energy Partner”.
‘Long plateau’
Emerging markets will consume much more oil in the future as they develop, says Nasser, whose company has been the world’s largest corporate greenhouse gas emitter since 1965.
“While US oil consumption is roughly 22 barrels per person per year, and the EU is around nine barrels, it is 2.4 barrels in Vietnam, 1.4 barrels in India and only one barrel in Africa. So, the Global South is likely to see significant growth in oil demand for a long time as national economies grow and living standards rise, just as developed countries [have] enjoyed for decades.”
See also: EMA grants conditional approvals to import additional 1.4GW of low-carbon electricity from Indonesia
While Nasser acknowledges that oil demand has “plateaued” in “mature economies” such as the European Union (EU), the US and Japan, he says “they still consume large quantities of oil”.
Even if the growth in oil demand reaches a standstill, Nasser says “most analysts” foresee a “long plateau” and not declining demand.
“More than 100 million barrels per day will realistically still be required by 2050. This is a stark contrast to those predicting that oil will almost fall to just 25 million barrels every day by 2050. Being short 75 million barrels every day will be devastating for energy security and affordability,” he adds.
Sun Cable receives a nod
Elsewhere, EMA has granted conditional approval to Sun Cable to import 1.75 gigawatts (GW) of low-carbon electricity from Australia’s Northern Territory to Singapore.
Speaking at the Asia Clean Energy Summit (ACES) 2024 on Oct 22, Minister for Manpower and Second Minister for Trade and Industry Tan See Leng says Sun Cable will have to further validate its technical and commercial plans and secure all requisite approvals from the relevant jurisdictions — “including the countries through which the subsea cables will pass through”.
Sun Cable’s US$24 billion ($31.6 billion) Australia-Asia Power Link (AAPowerLink) project involves laying a 4,300km subsea power cable connecting a solar farm in Australia’s Northern Territory to Singapore via Indonesian waters.
Considering the scale and distance of the project, Tan expects the Sun Cable project to only come online after 2035. “When completed, the project will be a meaningful complement to the Asean Power Grid and it will serve as an additional source of low-carbon electricity for Singapore.”
The AAPowerLink project aims to deliver up to 6GW of low-carbon electricity to industrial customers in Darwin — the capital city of the Northern Territory — and in Singapore. The first phase consists of 4GW of solar panels, and the project will supply around 800 megawatts (MW) to 900MW of solar power to industrial estates in Darwin via an 800km overhead cable.
This first stage won environmental approval from the Australian government in August.
EMA director Toh Wee Khiang says the project has “always seized the imagination” because of its “sheer ambition”. At 4,200km, the project will be the longest subsea power cable in the world when complete, surpassing the 4,000km-long Xlinks Morocco-UK Power Project, which is still in the works.
The AAPowerLink presents “huge technical challenges” because it needs to traverse the Timor Trough,” says Toh on LinkedIn. “Imagine unspooling a very heavy power cable down to the ultra-deep seabed.”
Mitesh Patel, interim CEO of Sun Cable, says the conditional approval is a “vote of confidence” from the Singapore government.
“We are confident we will meet the next stage of requirements for a conditional licence, which will include ongoing design refinements to continue our compliance with EMA’s technical requirements while delivering affordably priced electricity to our customers,” he adds in an Oct 22 statement.
Last month, Singapore raised its low-carbon electricity import target to 6GW by 2035, up from a 4GW target set in 2021.
Electricity imports are expected to meet a third of Singapore’s energy needs by 2035, and commercial operations under some import contracts could begin from 2028, said EMA on Sept 5. E
Photos: Jovi Ho/The Edge Singapore
