maximising lng import potential to ensure sustainability

Maximising LNG import potential to ensure sustainability and

diversification of gas supplies

Thierry Deschuyteneer GIE Executive Secretary

Gas Transport & Storage Summit, Berlin, 25 March 2014

2

Who we are

GLE represents >90% of regasification capacity in the EU

• GLE is one of the three columns of GIE (Gas Infrastructure Europe), the European association of the Transmission, Storage and LNG Terminal Operators

• GLE membership:

16 member companies

9 countries

2 observers

3

LNG terminals in Europe (large scale)

LEGEND

EXISTING

UNDER CONSTRUCTION/ COMMITTED

PLANNED / UNDER STUDY

DOCKSIDE REGAS FACILITY

CANARY

ISLANDS

Detailed information on LNG terminals available at http://www.gie.eu/index.php/maps-data/lng-map

EXISTING

22 LNG Terminals (196 bcm/y)

UNDER CONSTRUCTION / COMMITTED

6 LNG Terminals (32 bcm/y)

UNDER STUDY / PLANNED

32 LNG Terminals (>160 bcm/y)

Source: GLE LNG Map, update February 2014

4 Source: GLE LNG Investment Database, July 2013

Development of LNG capacity (incl. small scale)

5 Source: GLE LNG Investment Database, July 2013

Development of LNG capacity (incl. small scale)

6

Declining European LNG imports

• Import of LNG into Europe fell by a quarter between 2011 and 2012 and by almost a third between 2012 and 2013

• Between 2010 and 2013 European supply fell by 54.8 bcm, LNG import by 40.6 bcm

Source: Econgas

European* supply mix in bcm/y LNG imports to Europe* in bcm/y

7

Low level of utilization rates

All countries affected; since 2011 European average slashed by more than half and stands now just above 20%

If calculated on gross import volumes (i.e. before re-exports), the figures above would be improved for countries

where cargoes have been reloaded. However, European average would not be significantly changed.

0%

10%

20%

30%

40%

50%

60%

70%

80%

2009 2010 2011 2012 2013e

Utilisation Rates of European LNG Terminals(based on net import volumes)

Italy

Turkey

France

Europe

Spain

Belgium

Portugal

UK

Greece

NL

sources: GIIGNL GLE, Poten & Partnersfirst 8 months

8

A challenge for LSOs

Although acuteness of the situation may be different on each LNG terminal depending on technical or contractual characteristics, most LSOs share concerns regarding:

• management of “Minimum Send-out” to avoid the need for flaring

• management of inventory to maximize send-out on peak demand periods

Source Poten & Partners - LNG in World Markets - July 2013

• management of maintenance and operation (e.g., reduced lifetime of all the rotating equipment results in increasing maintenance cost)

• and more generally, the organization of the LNG terminals

9

Low LNG imports continue …

• After 27% fall between 2011 and 2012

• New 26% fall over the first eight months of 2013 (25 Mt LNG) vs same period 2012 (34 Mt LNG)

• Potential emergence of some trend towards stabilization?

0

1

2

3

4

5

6

LNG Imports in European Terminals*

Turkey

Greece

NL

Portugal

Italy

Belgium

France

UK

Spain

Mt/month

source: Poten & Partners,

* beforere-exports

10

LNG is part of the global energy market

• LNG is preferentially shipped to where prices are the highest, i.e. currently Asia and South America

• Future: a lot of uncertainties, e.g., nuclear energy policy in Japan, development of LNG demand in Asia, exports from North America, East Africa…

• However, sustained flows of LNG returning to Europe are not expected immediately

• European LSOs are proposing/developing new services to meet market needs, e.g. reloading

• LNG market works properly

Asia

EU

US

Source: Quarterly Report on European Gas markets, DG Energy, 2Q2013

11

25% liquefaction capacity increase

• Will reduce current LNG supply shortage

• Shift from Middle East to Australia enlarges availability of LNG for Europe

• US LNG will add flexibility

LNG liquefaction capacity (bcm/y)

500

400

200

300

100

0

Source: IEA 2014 2017

Russia

United States

Other Africa

Angola

Algeria

Norway

Latin America

Other ME

Qatar

Other Asia Pacific

Papua New Guinea

Indonesia

Australia

2015 2016

+100 bcm/y in 4 years

12

Development of “new” LNG services (1)

Reloading

• Transfer of LNG from the LNG reservoirs of the terminal into a vessel

• 10 LNG terminals have reloaded cargoes

• 12% of gross imports have been re-exported (6% in 2012) including toward EU countries

13

Development of “new” LNG services (2)

Transhipment

• Direct transfer of LNG from one vessel to another

• Offered in France (3 operations in 2013) and Spain and from 2015 in Belgium

Transhipment of LNG completed by Elengy and the Port of Nantes Saint-Nazaire at Montoir-de-Bretagne Source: GdF Suez

14

Small-Scale LNG services of terminal operators (1)

Loading of bunkering ships

• LNG is loaded on bunkering ships which supply to LNG-fuelled ships or LNG bunkering facilities for vessels

LSOs are developing services to support the application of LNG as a fuel

Source: World Maritime News Source: VEKA Group

15


Truck loading

• LNG is loaded on tank trucks which transport LNG in smaller quantities

Source: Reganosa

Source: The Rootselaar Group

16


Rail loading

• LNG is loaded on rail tanks which transport LNG in smaller quantities

Source: Fleet & Fuels, LNG Locomotives in Russia

Source: IIP Digital

17

• Data provided: Minimum ship size, hourly capacity, use of services in the past

• Data are presented per terminal of the GLE members

• Launched in February 2014

Published on www.gie.eu

Provides an overview of the new services offered by GLE members with special focus on Small-Scale LNG

• 5 services included: reloading, transhipment, loading of bunkering

ships, truck loading, rail loading

GLE New LNG Services Inventory

Source: GLE New LNG Services Inventory, February 2014

18

• GLE members are interested in supporting the development of Small-Scale LNG in Europe

• The map will not only show existing Small-Scale LNG infrastructure and projects (transport and off-grid applications), but also identify missing links in the network

• The map shall be available by the end of March 2014

Scope of work available on www.gie.eu

Development of a map showing the Small-Scale LNG infrastructure in Europe

Source: DRAFT GLE SSLNG Map, Dec 2013

19

GLE transparency initiatives (1)

All information available on www.gie.eu

European LNG terminal operators support transparency of the European LNG market

ALSI (Aggregated LNG Storage Inventory)

• A public platform making available aggregated operational data regarding the operation of EU LNG terminals

• Launched in March 2013

20


GLE LNG Terminals Transparency Template

• A common facilitating tool that makes the already existing information on individual websites more accessible to the market

• Published by all GLE members since the end of 2012

All information available on ww.gie.eu

21


• Annual update of the GLE LNG Map: Shows the existing European LNG terminals and projects indicating the status (planned and committed / under construction) with key information

• July 2013 version available


22


Update of the GLE LNG Investment Database

• A collection of GLE and non-GLE public information on LNG terminal projects around Europe. The projects are presented per country and company

• July 2013 version published


Thank you for your kind attention

GIE is proud to support

GIE - Gas Infrastructure Europe www.gie.eu

maximising lng import potential to ensure sustainability

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