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Robert Pritchard

APEC ENERGY TRADE & INVESTMENT TASK FORCE16 November 2009

CURRENT RISKS & OPPORTUNITIES FOR LNG TRADE

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The Key Role of LNG

• A proven and affordable technology

• Not just a “transitional fuel”

• Reduces the pace of growth of global GHG emissions

• Alleviates energy security concerns

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APEC LNG Plants November 2009

Economy Capacity (mtpa)

Australia 19.3

Brunei 7.2

Indonesia 36.6

Malaysia 22.8

Russia 9.6

USA 1.4

Total 96.9

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How LNG Trade is Conducted

• Most sold under 15 – 25 year long-term contracts

• Needed by both sellers and buyers for their security

• Spot and arbitrage markets developing

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Current Risks

• More LNG “looking for a home” (a good thing for APEC energy security)

• Development still depends on buyers entering into long-term contracts

• Carbon cost could cause “carbon leakage”

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Asia-Pacific Partnership (APP): Gas Market Growth Project Findings

• Producers and end users continue to rely on each other to develop the market

• Substantial growth opportunities

• Policies needed:– to support market development

– provide certainty for investors

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What Should the Task Force Do?

(i) Seek endorsement of Ministers for:• vigorous expansion of LNG trade and

investment

• the development of carbon trade

(ii) Recognise importance of alignment of climate policies

(iii) Recognise continuing importance of public education