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The Influence of North American LNG Exports on the Asian Gas Market – BG Group

BG Group · Dec 17, 2014 · 18 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. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 1
    The influence of North American LNG exports on the Asian gas market 3rd Asia Natural Gas Market Forum 20141217 17 December 2014 Steve Hill President, Global Energy Marketing & Shipping BG Group
  2. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 2
    BG Group Company overview 20 UK FTSE top 20 company 20 Operating in over 20 countries Knowledge and capability across the whole gas chain LNG business Flexible LNG supply portfolio 25LNG 25 LNG ships under management LNG*…
  3. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 3
    US LNG exports LNG US LNG exports happened as a result of two developments in the industry coming together
  4. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 4
    1. LNG Asian buyers addressing the impact of rising oil prices on LNG costs Various market prices (/mmBtu) 22 UK (NBP) - natural gas 20 US (HH) - natural gas 18 Japan (JCC) - crude oil 16 Japan Average LNG Import Price - LNG…
  5. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 5
    2. LNG Multiple factors aligning to unlock US LNG exports Key shale gas resources Large and low cost shale gas resource Henry Hub outlook discounted to oil Significant impact to Henry Hub prices considered unlikely Marcellus…
  6. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 6
    BG Group has played a key role LNG US LNG export projects: cumulative DOE filings 300 33 BG Lake 250 Charles BG 25 BG applies for Sabine Pass export license 18 200 for Lake BG signs SPA for Charles mtpa first exports…
  7. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 7
    US LNG exports LNG The impact of US LNG exports has been significant
  8. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 8
    US LNG: the next wave of new supply 500 450 LNG trade Supply- gap 400 forecast 350 Yet to FID US 300 mtpa Under construction 250 Australia 200 Qatar Supply: existing 150 and under construction 100 50…
  9. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 9
    US LNG: providing new pricing constructs and additional flexibility No upstream development required Clear and transparent regulatory environment Projects developed by utility / infrastructure companies Cost-based, HH…
  10. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 10
    US LNG: buyer perspective Positive Various market prices (/mmBtu) Forecast to be lower cost 25 JCC HH DES Asia Asia spot (DES) Asia LT proxy Pricing diversification Destination flexibility 20 Volume flexibility Supply…
  11. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 11
    5000 US LNG: 50 mtpa sold to end-users + Capacity holders Capacity + re-sales End- market mix 70 60 Unsold Unsold Unsold IOCs / IOC / Trading Houses 50 Trading houses IOCs European buyers / Sold to / Europe / 28% 40…
  12. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 12
    US LNG exports There are unanswered questions however
  13. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 13
    LNG How much US LNG export capacity will be built Proposed LNG supply by region 300 Excludes projects under construction 250 Canada US 25% (lower 200 48) 38% mtpa Other 150 37% 100 50 0 US (lower 48) Canada…
  14. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 14
    How much HH pricing do buyers want 2010 2015 2020 2025 10% 15 9% 4% 3% 13 7% % % HH HH 9% 39 86 Min = 9% % 39 Min = 7% 90% % 63 Max = 33% % Max = 58% % 12 % 350 Asian imports 300 Spot range = 10 to 18% Yet to be 250…
  15. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 15
    And what happens to Asian term LNG prices in future Oil indexation Hybrid / Gas hub Asia LNG / gas (HH, NBP, AECO) index Price level is what really matters 16
  16. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 16
    Conclusions : US exports emerged as a result of: 1. 1. buyers looking for an alternative to oil- indexed, destination specific contracts 2. 2. In the US: unutilized import capacity / shale- gas / Panama canal expansion BG BG…
  17. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 17
    : Lake Charles exports: past and future LNG1959128 2019 LNG Pioneer LNG voyage from Lake First exports from Lake Charles Charles (US) to Canvey Island (UK) terminal planned for 2019 28 Jan 1959 The Methane Pioneer at Lake…
  18. The Influence of North American LNG Exports on the Asian Gas Market – BG Group – slide 18

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