BG Group - Global Gas Major J.P. Morgan Oil & Gas Conference: Global LNG - 22 June 2012 M ti H Martin Houston t - Chief Chi f O Operating ti Offi Officer
Agenda BG Group: an overview Contracts and US exports LNG supply, demand and pricing 3
BG Group - overview
Key messages BG Group - global gas major Prospect of excellent LNG profit momentum BG Group well placed to extract value from US LNG exports 20 mtpa of LNG supply by 2015, route to 30 mtpa or more by 2020 Strong gas & LNG demand…
A global leader in the gas market Global Gas Major Connect gas to Secure competitively high-value g markets priced resources p Build and access Equity reserves markets Contracted resources Serve customers Skills to succeed…
Supply & markets 2002 to present Norway UK N th l d Netherlands Canada Belgium France Greece Spain Italy S. Korea US Turkey Portugal Kuwait Japan Algeria g China D i i Dominican R Republic bli UAE Mexico Egypt Oman…
BG Groups LNG volumes BG Group volumes (mtpa) QCLNG T1 & T2 Sabine Pass Atlantic Basin Future volumes at reference conditions (See Appendix) 8
BG Groups LNG sales BG Group sales (mtpa) High value markets Henry Hub Future volumes at reference conditions (See Appendix) 9
BG Groups US LNG position Sabine Pass contracted supply Train 1: 3.5 mtpa, first LNG 2015 Trains 2-4: 2.0 mtpa, 2016-2018 Export po t aut authorisation: o sat o US ttrading ad g pa partners t es Construction to start in…
Further potential BG Group opportunities QCLNG Train 3 Continuing with pre-sanction activities Cost efficiency vs resource maturation Tanzania Five successive g gas discoveries,, including g cretaceous p play y opener p…
30 mtpa t within ithi reach h LNG contracted volumes (mtpa) ( p ) Tanzania LNG QCLNG T3 2020 target Lake Charles export 2015 target Sabine Pass 12
Contracts and US exports
LNG contracts Short vs. long-term LNG contracts (2000 - 11) 250 2011 200 25% 75% Spot and short-term 150 mtpa a 100 Long-term 50 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: GIIGNL annual…
US export projects filed (with DOE) LNG import Sponsors Export FTA export Non-FTA Export Export Cumulative total in order terminals application approved export capacity capacity of filing filed approved (bcf/d) (mtpa) (bcf/d)…
LNG supply, supply demand and pricing
Long term supply challenges Supply prospects for 2020 (mtpa) -17% Speculative p Possible Probable Under Construction Onstream Source: Wood Mackenzie - LNG Service and Tool 17
Global gas supply challenge (2010 (2010-2020) 2020) ( (bcma) ) Sources: BG Group, BG Group interpretation of Wood Mackenzie 18
Strong gas demand growth World gas demand (bcma) ) CAGR 2010-2020 China 11.2% Asia (excluding China) 3.3% Russia and Central Asia 0.8% Middle East & Africa 4.4% South America 2.9% North America 2.1% Europe 0.1% TOTAL…
Asia Pacific LNG demand continues to rise Pacific Basin LNG supply/demand outlook 400 S Supply l (S (Speculative) l ti ) Supply (Possible) 350 Supply (Possible US exports) Supply (Under Construction) 300 Supply…
Gas pricing mechanisms by region Market price (NBP/TTL/ Zeehub) NW. Europe N. America Asia / Middle Market price (HH) S&E. Europe East Indexed to Indexed to crude Crude Oil / FO / GO oil (JCC) (or Brent) Coal switching in…
LNG and d gas prices i b by region i 25 20 mmBtu 15 US/m 10 5 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 JCC HH NBP Platts/Heren Asia Spot (DES) 0.1485 JCC (3 mo avg) Sources: Platts, Heren, WGI,…
Pricing conclusions A fully traded global gas market unlikely Regional pricing differentials will persist No trusted price marker in Asia HH / NBP a result of de-regulation LNG trade remains highly capital intensive…
Key messages BG Group is a global gas major Prospect of excellent LNG profit momentum BG Group well placed to extract value from US LNG exports 20 mtpa of LNG supply by 2015, route to 30 mtpa or more by 2020 Strong gas & LNG…
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