Diversifying LNG strategies and supply Andrew Walker VP Global LNG Benposium, Houston, 10th June 2015 Methane Shirley Elisabeth LNG vessel
Outline LNG industry development & outlook An evolving trade dynamic Existing impact of US export volumes Potential impact of US export volumes 3
LNG a high growth industry 250 LNG trade growth by exporting region Middle East 200 CAGR 9% / 15.8 mtpa Asia Altantic 150 CAGR 6.5% / 7.7 mtpa mtpa 100 CAGR 8% / 4 mtpa 50 0 1965 1970 1975 1980 1985 1990 1995 2000…
LNG a high growth industry 250 LNG trade growth by importing region Other 200 North America CAGR 9% / 15.8 mtpa Europe Asia Pacific 150 CAGR 6.5% / 7.7 mtpa mtpa 100 CAGR 8% / 4 mtpa 50 0 1965 1970 1975 1980 1985…
LNG trade today a snapshot 50 years old 240 mt (32 bcf/d) 19 exporting countries 30 importing countries 400 ships 10% of all gas consumed worldwide 30% of internationally traded gas
LNG trade outlook to 2025 (various consultants) Global LNG supply DES (mtpa) 500 2014 to 2025 CAGR(%) = 4.2 to 5.7 External LNG trade forecasts* 2025 New 400 Supply: up to 100 mtpa 300 Under construction Supply: 200 existing…
Global LNG imports by region Pacific Basin Atlantic Basin 350 350 Middle East Bunkers Other Asia Europe 300 Other 300 China Asia N. America S. America India 250 China 250 JKT mtpa 200 200 India 150 150 100 JKT 100…
Global gas trade, the recent past Algeria Middle East Trinidad W. Africa S.E. Asia Markets Australia LNG Pipe Source: BG Group Industry evolving from three main regions 9
Global gas trade, evolution Norway / Russia Sakhalin Middle East N.Africa W. Africa Trinidad S.E. Asia S. America Australia Markets Existing & proposed Primary ( 20 mtpa) LNG LNG trade routes Secondary (< 20 mtpa)…
Lake Charles terminal - Louisiana 11
US + Canada LNG imports Lake Charles 3 Elba Island Others (US) Canaport 2 Bcfd 1 0 Jan-10 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15…
European LNG imports: 2010 to 2014 12 3-month moving average 5 2014 vs. 2010 Netherlands 0 Lithuania 10 Netherlands -5 Spain 8 UK Belgium -10 Main Europe bcfd Turkey 6 -23.6 Spain -15 mt France Portugal 4 Italy…
Gas and LNG prices (2008 2015) Asian spot prices have varied between Global Asia Fukushima 110/bbl European prices recession recovery earthquake oil price (NBP) and oil parity 25 Trend expected to continue 20 /mmbtu 15…
US: the next supply wave 500 LNG trade 450 forecast 400 New supply 350 US 300 mtpa 250 Australia 200 Supply: Qatar existing and under 150 construction 100 50 0 2000 2005 2010 2015 2020 2025 Source: BG Group…
US LNG export projects - progress FERC status mtpa FOB capacity (non-FTA licensed volume) CE FLNG Gulf LNG 350 Downeast Louisiana LNG Venture Global Cameron 4-5 300 137 Annova LNG Texas LNG Port Arthur LNG 250 Rio Grande LNG…
Lake Charles LNG Export Project BG Group and ETE jointly developing the project BG Group to manage construction and operate BG Group responsible for the offtake ETE to own and finance the facility Planned capacity 15 mtpa (3…
US LNG: 50 mtpa sold to end-users Capacity Capacity + End- holders re-sales market mix 70 Unsold Unsold Unsold 60 IOCs IOC / Trading Trading houses Houses IOCs 50 Sold to European buyers end-users Europe / Resold to Lat Am…
LNG: a changing context Increasing LNG demand uncertainty for Asian buyers Increasing cost focus for traditional Asian buyers Evolving roles: the difference between buyers, sellers, portfolio-players, traders, & infrastructure…
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 indexed…
US LNG: potential future impacts Latent supply availability with transparent cost Growing liquidity: FOB Gulf of Mexico Evolving commercial terms and diversification of strategies and business models Sabine Pass export…
Diversifying strategies & new business models Diversifying strategies Traditional Vertical integration Horizontal integration Scale / Alliances Generalisation Specialist niches New business models Infrastructure provider…
How much US LNG export capacity will be built Proposed LNG supply by region 350 Excludes projects under construction 300 Canada 250 24% US (lower 48) 200 42% mtpa Other 34% 150 100 50 0 US (lower 48) Canada East…
LNG FIDs by region USA Russia Australia Qatar Rest of World Qatar Hiatus Australia USA Hiatus 50 40 mtpa 30 20 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: BG Group interpretation of…
Conclusions LNG is driving the globalisation of the natural gas trade Growth expected to continue - driven by Asian demand Trade is currently flexible but not very liquid US exports are already changing the game Price…
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