Cambodia at a Crossroads: An Economic Assessment of LNG-to-Power Plans 2

Table of Contents

• Figures 3
• Figure 1: Historical and Planned Electricity Demand Range in Cambodia’s PDMP 2022-2040 8 3
• Figure 2: Historical Power Generation Mix of Cambodia 9 3
• Figure 3: PDMP 2022-2040, Installed Capacity 10 3
• Figure 4: Scenarios for LNG-fired Power Capacity 13 3
• Figure 5: Cambodia’s Power Market Structure 14 3
• Figure 6: LNG Trade Flows, 2023 16 3
• Figure 7: Monthly Average Natural Gas and LNG Prices 17 3
• Figure 8: LNG Import Change in 2022 Mapped Against Real Output and Income Level 21 3
• Figure 9: Cambodia Fuel Imports as a Share of GDP 22 3
• Figure 10: Cambodia’s Monthly Fuel Import Bill (left); Annual Coal Import Bill (right) 23 3
• Figure 11: Monthly Average Coal and LNG Prices 24 3
• Figure 12: Cambodia’s LNG Import Bill Under Various Scenarios 25 3
• Figure 13: Residential Electricity Tariffs in Select Asian Countries 28 3
• Figure 14: Historical Cambodian Electricity Tariffs 29 3
• Figure 15: Levelized Cost of LNG-Fired Power Generation at Various Fuel Prices 31 3
• Figure 16: Average Generating Cost for Gas-fired Power Plants to Meralco 33 3
• Figure 17: Countries in Phases of Renewables Integration, 2022 34 3
• Figure 18: Delivered Prices of Oil and Henry Hub-Indexed Contracts 40 3
• Figure 19: Onshore (left) vs. FSRU (right) Import Terminal Configurations 44 3
• Figure 20: Small-scale LNG Supply Chain 48 3
• Figure 21: Economic Comparison of Vessel Sizes Considering Distance 50 3
• Figure 22: Major Components of Containerized LNG 51 3
• Figure 23: Typical Values for Additional Costs in the LNG Logistics Chain 52 3
• Tables 4
• Table 1: Economic Indicators and Change in LNG Imports, 2022 19 4
• Table 2: Gas and Pricing Regimes for Select Asian Countries 27 4
• Table 3: Sensitivity of LNG-to-power LCOE to Fuel and Capital Costs (US$/MWh) 32 4
• Table 4: Comparison of Typical Gas-Fired Power Plant Characteristics 35 4
• Table 5: Comparison of Long-term vs. Short-term LNG Procurement Strategies 38 4
• Table 6: Comparison of Oil and Henry Hub Indexation 41 4
• Table 7: Select Categories of Flexibility in LNG Contracts 42 4
• Table 8: Project Consideration Comparison for Onshore Terminals, FSRUs, and FSUs 45 4
• Table 9: Various LNG Demand Sizes and Infrastructure Requirements 49 4
• Table 10: Cost Comparison for Various LNGC Sizes 50 4
• Key Findings 5
• Executive Summary 6
• 1. Overview of Cambodia’s Power Market 8
• I. Electricity Demand and Supply Growth 8
• Figure 1: Historical and Planned Electricity Demand Range in Cambodia’s PDMP 2022-2040 8
• Figure 2: Historical Power Generation Mix of Cambodia 9
• II. Power Development Master Plan (PDMP) 2022-2040 10
• Figure 3: PDMP 2022-2040, Installed Capacity 10
• III. Proposed Role for LNG 11
• Figure 4: Scenarios for LNG-fired Power Capacity 13
• IV. Power Market Regulation in Cambodia 13
• Figure 5: Cambodia’s Power Market Structure 14
• Despite EDC’s historically strong credit quality compared to state-owned utilities in neighboring countries, recent years have demonstrated the challenges of balancing electricity price reductions while relying heavily on imported fossil fuels. A grow... 15
• I. LNG Supply and Demand Trends 16
• Figure 6: LNG Trade Flows, 2023 16
• II. LNG Pricing and Contracting Trends 17
• Figure 7: Monthly Average Natural Gas and LNG Prices 17
• III. Recent Experience of Emerging Asian LNG Importers 18
• Table 1: Economic Indicators and Change in LNG Imports, 2022 19
• VI. Implications of Recent LNG Market Trends for Cambodia 20
• Figure 8: LNG Import Change in 2022 Mapped Against Real Output and Income Level 21
• 3. Cambodia’s Potential LNG Demand and Annual Import Costs 22
• I. Cambodia’s Historical Fuel Import Bill 22
• Figure 9: Cambodia Fuel Imports as a Share of GDP 22
• Figure 10: Cambodia’s Monthly Fuel Import Bill (left); Annual Coal Import Bill (right) 23
• II. LNG Costs Would Likely Entail Sharp Increases in Cambodia’s Fuel Import Bill 23
• Figure 11: Monthly Average Coal and LNG Prices 24
• III. LNG Volumes Required Under Cambodia’s Power Development Scenarios 25
• Figure 12: Cambodia’s LNG Import Bill Under Various Scenarios 25
• IV. Impact of Foreign Exchange Volatility 26
• V. Distribution of LNG Costs through the LNG-to-Power Value Chain 26
• Table 2: Gas and Pricing Regimes for Select Asian Countries 27
• 4. Impact of LNG on Cambodia’s Electricity Generation Costs 28
• I. Power Pricing Trends in Cambodia 28
• Figure 13: Residential Electricity Tariffs in Select Asian Countries 28
• Figure 14: Historical Cambodian Electricity Tariffs 29
• II. Levelized Cost Analysis of LNG-to-Power 30
• Figure 15: Levelized Cost of LNG-Fired Power Generation at Various Fuel Prices 31
• III. Impact of Fuel and Capital Costs 31
• Table 3: Sensitivity of LNG-to-power LCOE to Fuel and Capital Costs (US$/MWh) 32
• IV. Case Study: Impact of LNG Imports on Generation Costs in the Philippines 32
• Figure 16: Average Generating Cost for Gas-fired Power Plants to Meralco 33
• V. The Role for LNG-to-Power Plants: Baseload or Balancing? 33
• Figure 17: Countries in Phases of Renewables Integration, 2022 34
• Table 4: Comparison of Typical Gas-Fired Power Plant Characteristics 35
• VI. Case Study: The Complexities of Risk Sharing in Vietnam’s LNG Value Chain 37
• 5. Strategic LNG Procurement Considerations 38
• Table 5: Comparison of Long-term vs. Short-term LNG Procurement Strategies 38
• Figure 18: Delivered Prices of Oil and Henry Hub-Indexed Contracts 40
• Table 6: Comparison of Oil and Henry Hub Indexation 41
• Table 7: Select Categories of Flexibility in LNG Contracts 42
• 6. Infrastructure Analysis for Cost Efficiency and Energy Security 44
• I. Onshore Terminals and FSRUs 44
• Figure 19: Onshore (left) vs. FSRU (right) Import Terminal Configurations 44
• Table 8: Project Consideration Comparison for Onshore Terminals and FSRUs 45
• II. Small-Scale and Containerized LNG 48
• Figure 20: Small-scale LNG Supply Chain 48
• Table 9: Various LNG Demand Sizes and Infrastructure Requirements 49
• Table 10: Cost Comparison for Various LNGC Sizes 50
• Figure 21: Economic Comparison of Vessel Sizes Considering Distance 50
• Figure 22: Major Components of Containerized LNG 51
• Figure 23: Typical Values for Additional Costs in the LNG Logistics Chain 52
• Conclusion 53
• About IEEFA 54
• About the Authors 54
• Sam Reynolds 54
• Chris Doleman 54