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Global LNG Update – BG Group

BG Group · Sep 10, 2013 · 41 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Global LNG Update – BG Group – slide 1
    Global LNG Update Matt Schatzman, EVP GEMS September 2013 Methane Shirley Elisabeth LNG vessel
  2. Global LNG Update – BG Group – slide 2
    Introduction Competitively Flexible High value BG Groups priced resources portfolio markets LNG strategy Deep knowledge & relationships in high value markets Portfolio of competitively priced resources Flexibility to supply…
  3. Global LNG Update – BG Group – slide 3
    Introduction Market outlook Todays presentation BG Groups LNG business BG Groups LNG growth options 3
  4. Global LNG Update – BG Group – slide 4
    Market outlook Dragon LNG import terminal, UK
  5. Global LNG Update – BG Group – slide 5
    Market outlook LNG imports by region 2008-15 (mtpa) Market loosening Market tightening Supply outpacing Asia Asia demand growth outpacing supply demand growth LNG market has tightened Europe FORECAST* Asia M. East North…
  6. Global LNG Update – BG Group – slide 6
    Market outlook Prices (/mmbtu) Fukushima Asian spot prices have Global Asia earthquake recession recovery varied between European prices (NBP) and oil parity Asia long-term proxy as Asia spot Oil parity upper resistance level…
  7. Global LNG Update – BG Group – slide 7
    Market outlook Rapid emergence of US, Canada & East Africa as LNG supply potential large-scale suppliers raises 3 key questions landscape evolving Will the market be Will LNG contract Will supply oversupplied pricing change…
  8. Global LNG Update – BG Group – slide 8
    Market outlook Global gas demand (bcma) 2.4% CAGR Gas demand growth driven by Asia/ Middle East Source: BG Group outlook 2013 8
  9. Global LNG Update – BG Group – slide 9
    Market outlook Global LNG supply (mtpa) External LNG trade forecasts* 4.8% CAGR Supply gap: LNG: a high 150 mtpa growth Under construction industry Supply: existing and under Existing construction Sources: Supply: BG Group…
  10. Global LNG Update – BG Group – slide 10
    Market outlook Gas demand (bcma) LNG upside: 100+ mtpa Total gas Asia demand upside: 350 bcma upside could add 100 mtpa LNG demand Source: BG Group outlook 2013 10
  11. Global LNG Update – BG Group – slide 11
    Market outlook Asia LNG demand outlook (mtpa) 2013 Asia LNG 2011 2010 demand 2008 growth rising expectations Date of forecast: Source: BG Group interpretation of Wood Mackenzie data 11
  12. Global LNG Update – BG Group – slide 12
    Market outlook Supply prospects for 2020 (mtpa) Supply prospects for 2025 (mtpa) -35% Supply -34% Current BG has fallen outlook for 2025 supply* Expected short of new supply Range of 2025 New supply views* expectations…
  13. Global LNG Update – BG Group – slide 13
    Market outlook Proposed LNG export capacity* by equity position** (mtpa) Lead partner has equity in current LNG projects totalling: Proposed LNG supply - the expertise gap 0 to 9 mtpa Source: PFC Energy acquired by IHS (2013)…
  14. Global LNG Update – BG Group – slide 14
    Market outlook LNG production capacity 2025 (mtpa) Supply constraints US LNG volumes expected to be limited Source: BG Group outlook 2013 14
  15. Global LNG Update – BG Group – slide 15
    Market outlook Global LNG supply (mtpa) Range of external LNG trade Demand forecasts* upside BG trade Other outlook New BG Group Other supply 120 LNG trade US** mtpa outlook Under construction Supply: existing and under…
  16. Global LNG Update – BG Group – slide 16
    Market outlook Asia DES (/mmbtu) Margins driven by future Asia prices Asia LT Prices set by supply-demand proxy* Supplier balance Cost of margin Price range range Europe prices set the lower NBP + limit supply to Shipping 11.30…
  17. Global LNG Update – BG Group – slide 17
    Market outlook ...but fundamentals Yes, the market is will continue to drive evolving markets LNG pricing Asian buyer mind-set is changing Asia gas hubs unlikely for some time evolution costs and flexibility LNG markets will…
  18. Global LNG Update – BG Group – slide 18
    Market outlook LNG trade (mtpa) 15% LNG trade 17% still largely Flexible volumes as percentage of (2012) inflexible total market 4% Source: BG Group outlook 2013 18
  19. Global LNG Update – BG Group – slide 19
    Market outlook New supply will Non-US LNG Illusion of a coming BG Group buyers market take longer than envisaged projects will also be required LNG market outlook Prices will remain Substantial demand Majority of volumes…
  20. Global LNG Update – BG Group – slide 20
    BG Groups LNG business Methane Kari Elin LNG vessel Atlantic LNG terminal, Methane LydonTrinidad Volneyand LNGTobago vessel
  21. Global LNG Update – BG Group – slide 21
    BG Groups LNG business UK Global W. Canada USA S. Korea Japan assets, Trinidad Nigeria Egypt India China supply and & Tobago Equatorial Singapore* markets Guinea Tanzania Australia Chile Existing long-term supply…
  22. Global LNG Update – BG Group – slide 22
    BG Groups LNG business Four current long-term sources 50/50 equity & third party Long-term Destination flexibility supply Mechanisms to share diversion margins by source Two new supply sources QCLNG Sabine Pass 22
  23. Global LNG Update – BG Group – slide 23
    BG Groups LNG business Hub based supply Existing (originally purchased for US delivery) Long-term Sabine Pass LNG Oil supply QCLNG net back price by cost 23
  24. Global LNG Update – BG Group – slide 24
    BG Groups LNG business Majority of supply sold long term into Asian markets BG will be Chinas largest Sales by supplier country * Uncontracted includes LNG for ship use. For 2013, uncontracted volumes have been or will be sold…
  25. Global LNG Update – BG Group – slide 25
    BG Groups LNG business 70% sold into medium and long-term markets Long-term contracts typically 20 years Sales by Medium-term contracts term 2-8 years 30% uncontracted between 2015 and 2017 Supply constrained market Bridge new…
  26. Global LNG Update – BG Group – slide 26
    BG Groups LNG business Long-term contracts already sold into oil indexed markets Uncontracted volumes Sales by expected to be sold into high value markets price * Uncontracted includes LNG for ship use. For 2013, uncontracted…
  27. Global LNG Update – BG Group – slide 27
    BG Groups LNG business Competitively Flexible High value Benefits of priced resources portfolio markets BGs flexible LNG portfolio Our flexible portfolio has provided strategic long-term value via: The diversion of volumes away…
  28. Global LNG Update – BG Group – slide 28
    BG Groups LNG business (mtpa) IOC managed volumes (2017) Note: Estimates based on data from Wood Mackenzie LNG tool (Q2 2013) Flexible = uncommitted and/or divertible volumes BG examples: committed = Singapore, Chile, Japan,…
  29. Global LNG Update – BG Group – slide 29
    BG Groups LNG business Number of ships at year end Enabler to LNG marketing & captures value Scale one of the largest LNG fleets of IOCs Flexibility contract terms/ownership/ Flexible fleet size shipping Cost efficient…
  30. Global LNG Update – BG Group – slide 30
    BG Groups LNG business Our hubs work around the clock Optimising the portfolio Managing contracts Number of ships Backfill opportunities Optimise fuel usage Storage levels at BG terminals Global capability, 24/7 operations,…
  31. Global LNG Update – BG Group – slide 31
    BG Groups LNG business Asia Portfolio 3 optimisation Trinidad & Tobago 2 in practice South 1 America /mmbtu unless Purchase Shipping Sales price Margin Value otherwise noted price* cost Original transaction: 1 T&T to Asia…
  32. Global LNG Update – BG Group – slide 32
    BG Groups LNG business Strong portfolio of sales Growing, competitively Summary priced & diverse supply base contracts into Asia, mainly oil-linked of portfolio Flexibility & marketing Provides basis for strong capability adds…
  33. Global LNG Update – BG Group – slide 33
    BG Groups LNG growth options Martin Houston, COO September 2013 QCLNG LNG plant, Curtis Island, Australia
  34. Global LNG Update – BG Group – slide 34
    BG Groups LNG growth options Supply facilitates markets Supply Markets Using our flexibility to grow Markets pull supply Pre-capture new markets Customer relationships give confidence to: Marketing advantage (de-risks project…
  35. Global LNG Update – BG Group – slide 35
    BG Groups LNG growth options Multiple new LNG supply options Prince Rupert: Lake Charles: Tanzania: QCLNG: 14 mtpa 15 mtpa 10 mtpa 4.25 mtpa 35
  36. Global LNG Update – BG Group – slide 36
    BG Groups LNG growth options Horn Connects British Columbia gas to River BRITISH COLUMBIA ALBERTA Asian markets Two train 14 mtpa project; third train option Prince Spectra pipeline LNG plant - attractive plant site secured on…
  37. Global LNG Update – BG Group – slide 37
    BG Groups LNG growth options Efficient opportunity to add export infrastructure to existing facility Three trains totalling 15 mtpa Lake Charles BG Group & Energy Transfer jointly developing the project; no BG Group capital LNG…
  38. Global LNG Update – BG Group – slide 38
    BG Groups LNG growth options Greenfield east-African development, Ngisi targeting Asia markets Chewa Multi-train project totalling 10 mtpa BLOCK 4 Tanzania Pweza Papa Total gross resources of 13 tcf across Blocks 1,3 & 4 LNG…
  39. Global LNG Update – BG Group – slide 39
    BG Groups LNG growth options Third train opportunity 4.3 mtpa Environmental approvals in place; sufficient pipeline capacity QCLNG CNOOC has option up to 25% equity Train 3 2 - 3 year E&A programme Project dependent on…
  40. Global LNG Update – BG Group – slide 40
    BG Groups LNG growth options H2 2013 2014 2015 2016 2017 Prince Regulatory process and EIA Rupert FID environmental surveys permit New LNG projects Lake Charles FEED / FERC approval process FID indicative timelines Site…
  41. Global LNG Update – BG Group – slide 41
    BG Groups LNG growth options Continued strong Fundamentals LNG continues to demand remain robust; be a high-growth LNG industry Supply constrained market to remain tight summary despite US exports positive outlook Diverse, BG…

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