Evolution of the Asian LNG Industry

ExxonMobil Gas & Power Marketing

• 30 years experience• With our partners:

» Supply about 20% of world’s LNG today» Arun 6.2 MTA, Qatar 14.3 MTA

• Qatar primary growth vehicle• Financial Strength; Excellence in

Technology; Mega-Project Skills

• 30 years experience• With our partners:

» Supply about 20% of world’s LNG today» Arun 6.2 MTA, Qatar 14.3 MTA

• Qatar primary growth vehicle• Financial Strength; Excellence in

Technology; Mega-Project Skills

Active development Producing or under construction

North America

Europe

QatarQatarAsia

Arun

Gorgon

Nigeria

Angola

3

LNG Value Chain

• All links of the chain are capital intensive businesses

• Chain is defined by interdependence of projects (shared risks), held together by the commercial structure

~ $0.5-1.0bn ~ $3 bn~$0.1s bn~ $0.5bn~ $2 bn

LNG

ReceivingTerminal

Buying & Receiving

GasLNG

GasDistribution

Distribution

Shipping

Shipping

GasField

Development

Gas

Liquefaction

Upstream Projects

PowerGeneration

TownGas

End-Users

4

Characteristics of Asian LNG Industry

• Japan, Korea and Taiwan are historic major LNG importers

• Durable long-term contracts secured competitive supply and supported investments and commitments

• High credit-rating buyers / sellers; financing available

• Importers control own infrastructure

• Sales predominantly on CIF basis

5

LNG Business in Transition

• Worldwide growing LNG demand

• Increasingly remote and technically challenging supply sources; increased scale

• Financial strength important throughout value chain

• Long-term contracts remain crucial to underpin upstream investments

6

LNG Demand

0

50

100

150

200

250

1990 1995 2001 2005 2010 2015

Japan, Korea, Taiwan

China, India

Rest of World

MT

Source: PFC Energy

7

Changes in LNG Market

• Deregulation, interfuel competition, and economic growth in core markets impacting:

» Volume flexibility

» Contract term

• Spot/short-term sales increasing

• FOB sales becoming more common

• ‘Liquid’ market access in U.K. and U.S.

8

Regulation and Deregulation

• Legislative/regulatory principles important to investors:

» Stability of legal and fiscal frameworks

» Equitable laws, regulations and dispute resolution

» No artificial infrastructure obstacles

» No import restrictions

» Sanctity of contracts

» Freedom of commercial arrangements and structures

» Market-based, non-subsidized commodity pricing

9

Changes in LNG Technology

• Increased capital intensity developers need:» Large project development capability» Financial strength and capital market access» Long-term investment certainty

Liquefaction

Shipping / Receiving

FieldDevelopment Production technology advances

Increasing train size

Larger ships andterminals

10

New LNG ImportTerminal Developmentsand Proposals

2001 LNG Demand

2010 LNG Demand

Global Integration of LNG Markets

11

Requirements for Continued Growth

• Economic growth

• Balanced transition to liberalized market environment

» Preserve ‘success factors’

» Consultation through Value Chain

• Stable framework to foster commercial freedom

» International competitive fiscal regimes

» Proper regulatory environment

» Free market based pricing and contract terms

12

Summary

• Significant LNG demand growth can be met by development of competitive supplies

• Long-term investment certainty and risk reflective returns are required

• Preserve ‘success factors’ and carefully implement change

• Regulatory environment and successful track record are important