asian natural gas: a softer market is coming · asia pacific lng base case import forecasts...
TRANSCRIPT
Asian Natural Gas: A Softer Market is coming
Presented at the U.S. EIA’s International Natural Gas Workshop
August 23, 2012
Robert Smith Principal Consultant, FGE Dubai
The dissemination, distribution, or copying by any means whatsoever without FACTS Global Energy’s prior written consent is strictly prohibited.
2
0
25
50
75
100
125
150
175
200
225
250
275
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
mm
t
Asia Europe Americas Middle East
Global LNG Trade: 2000-2012 6%
Global LNG Trade: Asia is Still King
72%
23%
5%
2000
64%
27%
8% 1%
2011
Note: 2000-2011 data are actual, 2012 is forecast.
3
Regional LNG Import Outlook (mmtpa)
Europe
Middle East
Asia Americas
87 123 152
2015 2020 2030
192 243
313
2015 2020 2030
18 20 19
2015 2020 2030
6 14 30
2015 2020 2030
World’s Total: 401 mmtpa by 2020, 514 mmtpa by 2030
4
0
50
100
150
200
250
300
Japan, South Korea and Taiwan India and China New Markets (ID, MY, SG, TH)
81%
18%1%
2012
58%32%
10%
2030
Forecast of Asian LNG Trade
2011-2030 AAGR: JKT: 1.3% CN+IN: 6.9% New Markets: 21.5%
5
(8.0)
(6.0)
(4.0)
(2.0)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2020
mm
tpa
Asia Pacific LNG Imports by Country (Year-on-Year Change)
New Markets*
CN+IN
JKT
* Indonesia, Malaysia, Singapore, and Thailand.
New terminals and long-term contracts
startups
Longer-Term Outlook: Who Leads the Growth?
‘Shrinking’ demand
Recovery in LNG demand
Industrial sector gas demand; cost competitiveness;
seasonality drivers
New terminals startups;
domestic gas supply deficits
Nuclear start-up aids in reducing growth
6
Snapshot of Japan’s Nuclear Power Situation: Most Affected
• Operating units: Kansai Electric’s 1.18 GW Ohi Units 3 and 4
100%
76%
100% 100% 100% 100% 100%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
2
4
6
8
10
12
14
16
18
20
TEPCO Kansai E Chubu E Kyushu E Tohoku E JAPCO Hokkaido E
Capacity Outages (GW) Total Capacity (GW) % Outages (RHS)
Japan Nuclear Operating Rate 4.8%
7
-
10
20
30
40
50
60
70
2012 2013 2014 2015 2020
mm
tpa
LNG Uncontracted Demand
Likely New Markets Uncontracted Demand
India Uncontracted Demand
China Uncontracted Demand
Taiwan Uncontracted Demand
Korea Uncontracted Demand
Japan Uncontracted Demand
Likely uncontracted demand including contract renewals.
Asia Overview: Imports and Uncontracted Demand
Top two countries that will be under pressure to secure additional supplies are Japan and Korea.
*Includes Indonesia, Malaysia, Singapore, and Thailand (started importing LNG in 2011). ** Other Potential Markets include Pakistan, Vietnam, Bangladesh, and Philippines.
Asia Pacific LNG Base Case Import Forecasts Scenarios (mmtpa)
Year Japan South Korea Taiwan India China Likely New Markets*
Total Asia
Mature Markets
Emerging Markets
Other Potential
Markets**
Total Asia Pacific
Potential
2009 64.6 25.8 8.6 9.1 5.5 0.0 99.0 14.6 0.0 113.6
2010 70.1 32.6 10.8 8.9 9.4 0.0 113.5 18.3 0.0 131.8
2011 78.5 36.7 12.0 13.5 12.2 0.7 127.2 26.4 0.0 153.6
2012 82.2 38.0 12.3 14.8 15.0 2.0 132.5 31.8 0.0 164.3
2015 84.3 39.5 13.1 18.3 25.8 11.3 136.9 55.4 0.0 192.3
2020 88.5 43.5 14.6 24.5 42.0 22.6 146.6 89.0 7.7 243.3
8
Other Markets to Keep an Eye on…
Singapore 18%
Thailand 37%
Indonesia 18%
Malaysia 27%
Southeast Asia LNG Import Forecast (2020) 23 mmtpa
UAE (Dubai) 23%
UAE (Northern Emirates)
12% Kuwait
23%
Bahrain 22%
Saudi Arabia
20%
Middle East LNG Import Forecast (2020) 14 mmtpa
9
Regional LNG Supply Capacity Outlook (mmtpa)
Atlantic Basin
Middle East Pacific Basin
Med Basin
World’s Total: 302 mmtpa by 2015, 543 mmtpa by 2020, and 651 mmtpa by 2030
51
134 195
2015 2020 2030
110
252 289
2015 2020 2030
41 47 44
2015 2020 2030
100 109 123
2015 2020 2030
10
Soft Market Expected to Emerge Later This Decade (Potential Pressure Points?)
100
150
200
250
300
350
2012 2013 2014 2015 2016 2017 2018 2019 2020 2025 2030
mm
tpa
Demand*
Total Supply Capacity Targeting Asia**
*Base case scenarios (JKTIC + New markets)**Includes potential LNG exports to Asia from Pacific Basin, Middle East, US and Canada
Perceived market tightness in near term up to 2016
Market condition is expected to ease later this decade, with highest surplus occurring in around 2020.
11
Outlook for LNG Prices
12
• Used by Qataris and others with global portfolios
• Buyers need mid-term volumes until next rush of supply
• Sellers want to lock away long-term demand
• Tranche pricing
Buy Long-Term Higher, Get Mid-Term Lower
Now 2016
2016 ------- 2035
Mid-term = lower price
Long-term = higher price
13
Hybrid Pricing—What Buyers Want?
(%*HH) (%*JCC) LNG Price
Minor %
Majority %
• Majority of supplies locked-in for security of supplies + traditional oil indexation.
• Minor supplies output are Hub-related; subjected to price volatility but preferred with associated flexibilities?
• Same tranche of volumes but at a basket of oil-indexed and Hub-related pricing?
Contract
Volumes
(mmtpa)
14
Projected Price of New Asian LNG Contracts vs HH, NBP, and JCC (US$2011)
15
6
8
10
12
14
16
18
20
50 60 70 80 90 100 110 120
DES
Pri
ce, $
/mm
Btu
Oil Price Scenario ($/bbl)
Hypothetical US LNG Price (FOB HH @ $4-8/mmBtu)*
14.5% + Shipping LNG Price (assumed to Japan)
13% + Shipping
* FGE forecast HH prices for period 2015-2030 Note: Liquefaction + Shipping assumed around $6.50/mmBtu
Direct Purchases From The US … not always cheaper but does provide some savings at high oil prices
16
Thank You