Coal is still preferred in the developing nations providing the energy demand, IIR vice president global analytics Shaheen Chohan told ICN sister publication Energy News.

The LNG outlook looks rosy beyond 2022 with 30 new markets opening up with about $53 billion of regasification is planned to kick off between now and 2021 outside Australia’s traditional customers Japan, China and South Korea, Chohan said.

However, all this LNG needs compete with coal, which Chohan said was very cheap at the moment as it’s low-cost, easy to transport and load, has zero geopolitical risk, and the world is awash with it.

“So the LNG producers that try to find a new customer are entering into the Southeast Asia region where countries will be big consumers of coal in the future,” he said.

“If you look at the composition of Southeast Asia, they’re still building brand new coal-fired plants.

“There are no environmental mandates at a country level that are forcing government policy. Everybody has a renewable energy target of some description, but it’s about how enforced that really is.”

While some 195 countries went to Paris in December to try look at capping carbon emissions at 2% or target 1.5% growth over the 2022 period, Chohan said the fact remained that “coal is still cheap and gas is going to have to displace that”

He also suggested clean coal technology like high-efficiency, low-emissions (HELE) plants, may not be the saviour the World Coal Association thinks it will be.

“Clean coal technology is expensive and has not really been fully deployed yet,” he said.

“There have been a couple of those projects in North America but they’ve been costly and over-running. So I don’t think clean coal is going to be the answer that’s going to save coal-fired generation.

IIR’s global VP oil/gas and petroleum refining Chris Paschall also told Energy News that many countries are looking at fuel optionality to find the cheapest feedstock.

“In recent years gas has been expensive as it was tied to crude oil, and now has become cheap, but coal is still cheaper in some parts of the world,” he said.

“There are currently several areas in the world like South Korea, Belarus and others that have switched to a cheaper fuel mix like coal or bunker fuel, so their LNG imports have reduced.”

In its latest Oil & Gas Monthly Report, the Singapore Exchange said the switch from coal to gas may be slower than many anticipate – unless gas prices fall substantially or carbon prices rise.

The results of the SGX’s Outlook Survey at the end of last year revealed huge uncertainty in the ability of LNG to compete with coal on cost in the coming years.

A recent report from the UK Energy Research Centre also raised questions about the current “dash for gas” in the region, noting that without carbon capture and storage technology, gas-fired electricity in the UK would need to fall to about 10% of the overall mix in order to meet 2050 emissions targets.

“While the region may help absorb some excess LNG supply in the years ahead, it might not be wise to bet one’s house on Europe becoming the world’s ‘clearing market’ for LNG,” the SGX said.

Echoing Chohan’s concerns about gas’ geopolitical risk over that of coal, the SGX also said that while the political agenda to enhance energy security through greater diversification of supply was understandable, the economics need to stack up too.

The SGX believes higher-than-necessary energy costs due to forced diversification would also hurt the competitiveness of Europe’s manufacturing industry.

A recent report from The Oxford Institute for Energy Studies highlighted that, if, for instance, Russian gas became low-priced and abundant, then the historical premise for Europe’s debate on supply security would be undermined.