ENERGY POLICY & LNG SUPPLY AND DEMAND in TAIWAN
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CPC CORPORATION, TAIWAN ENERGY POLICY & LNG SUPPLY AND DEMAND in TAIWAN Sheng-Chung LIN Chairman CPC Corporation, Taiwan LNG Producer Consumer Conference Tokyo, Japan 19 September 2012
Transcript of ENERGY POLICY & LNG SUPPLY AND DEMAND in TAIWAN
CPC CORPORATION, TAIWAN
ENERGY POLICY & LNG SUPPLY AND DEMAND
in TAIWAN
Sheng-Chung LIN Chairman
CPC Corporation, Taiwan
LNG Producer Consumer Conference Tokyo, Japan
19 September 2012
CPC CORPORATION, TAIWAN
Outline
Ⅰ Introduction of CPC
Taiwan’s Energy Policy Ⅱ
LNG Supply and Demand in Taiwan III
VI Market Expectations
CPC CORPORATION, TAIWAN 3
CPC Corporation, Taiwan: Leading energy company in Taiwan
Exploration & Production
21 fields in 7 countries
Fuels Marketing LPG Lubricants
Filling-Station (market share:77%) CPC-owned: 639 franchise: 1,382
Refinery & Petrochemicals
3 refineries (capacity:720,000 barrels/d) 1 petrochemical plant (ethylene:850,000 ton/y)
CPC, established in 1946, is an integrated oil & gas company. Ranking 337th in the world and 3rd in Taiwan on the Fortune 500 list.
Natural Gas
2 LNG re-gasification terminals
CPC CORPORATION, TAIWAN
Taiwan’s Energy Policy
CPC CORPORATION, TAIWAN
Energy Overview in Taiwan
33.2% 34 %
49.5% 45.3%
6.9%
11.6% 10.1%
8.7% 0.3%
0.5%
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2002 2011
others Nuclear Natural Gas Crude & Petrol Products Coal Products
103 KLOE
In last decade: Primary Energy grew 24% Natural Gas increased 109%
In 2011: Crude & Coal shared 79.3% of Primary Energy Supply Natural Gas 11.6% & Nuclear 8.7% respectively 99.33% of total energy supply imported
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Primary Energy Supply
CPC CORPORATION, TAIWAN
60%80%
100%120%140%160%180%200%220%240%
2002 2005 2008 2011
Year 2002 =100%
LNG ConsumptionDomestic energy consumptionReal GDPEnergy Intensity
Energy & GDP Growth Rate
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In last decade(2002-2011): Energy Intensity: 20% decreased LNG Consumption: 125% increased Real GDP : 47% increased
2012 Estimated GDP growth rate is 1.66%
Source: Directorate General of Budget, Accounting and Statistics, ROC * Energy intensity, defined as Domestic energy consumption divided by Real GDP.
LNG grows rapidly in last decade
+125%
+47%
-20%
CPC CORPORATION, TAIWAN
New Energy Policy in Taiwan
Ensure nuclear energy safety
Steadily reduce nuclear energy dependence
Build a friendly low-carbon green energy environment
Gradually transform into a nuclear-free homeland
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Completed the construction of 4th nuclear power plant (2.7GW) in 2016.
Phase out 1st ~3rd nuclear power plants (5.1GW) .
Increase natural gas & renewable energy utilization for eco-friendly.
4-Stage Objectives:
CPC CORPORATION, TAIWAN
Ⅰ
LNG Supply and Demand
in Taiwan
CPC CORPORATION, TAIWAN
LNG/NG Facilities CPC owns and operates 2 receiving terminals.
Tatan Station
Taichung LNG Receiving Terminal
Yung-An LNG Receiving Terminal
Tunghsiao Station
Figure “8” loop of Gas Transmission Network
Tank storage: 480,000 KL Capacity of unloading: 4.5 mtpa
Tank storage: 690,000 KL Capacity of unloading: 9 mtpa
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CPC CORPORATION, TAIWAN
LNG Supply: Historical imported volume
98% Natural gas imported. 6th largest LNG importing country in the world. Rising demand of LNG results from the growth of electricity and
industry.
8.3 9.1 8.8 10.9
12.0
-
3
6
9
12
15
2007 2008 2009 2010 2011
Unit: MTPA
90%
100%
110%
120%
130%
140%
150%
2007 2008 2009 2010 2011
LNG growth rateElectricity growth rateGDP growth rate
Y2007=100% +45%
+17%
+4%
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CPC CORPORATION, TAIWAN
82 % gas for power generation (Taipower & IPPs) in 2011 29 % electricity from gas-fired generators (15GW) LNG as main substitute for nuclear when existing plants
decommissioned
Taipower 60%
IPPs 22%
Industrial 7%
Residential 11%
Gas Customers Mix
29.1%
40.3%
19.0%
3.3%
1.4%
2.6%
4.3%
Gas
Coal
Nuclear
Oil
Hydro Power
Renewable Energy
Cogeneration
Electricity Mix
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LNG Demand: Main customers & electricity mix
CPC CORPORATION, TAIWAN
• Purchase from reliable & stable sources at reasonable price
• Major volume from long-term contracts Security
• Allocation to worldwide supply sources • Interest in new supply sources from
USA, Canada and Australia Diversity
• Portfolio of pricing index, Oil-linked & US Gas-linked
• Participation in upstream Competitiveness
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LNG Procurement Strategy
CPC CORPORATION, TAIWAN
101214161820
2011 2015 2016 2019 2023 2030
LNG Demand Forecast
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LNG Demand on New Energy Policy To reach the goal of low-carbon green energy environment,
Taiwan government has drawn an ambitious plan to increase LNG consumption.
LNG demand may increase from 12 million ton in 2011 to 20 million ton in 2030 depending on economic situation and energy demand.
MTPA
67%
20 MTPA
CPC CORPORATION, TAIWAN
Consumers Expectations
CPC CORPORATION, TAIWAN 15
Main LNG Consumers
70.87
32.64
11.18
79.09
35.55
12.2
11.6
8.92 9.12
8
9
10
11
12
0
20
40
60
80
100
Gro
wth
(%)
Dem
and
Q'ty
(106
T)
2010 2011 % change
Japan South Korea Taiwan -20
-10
0
10
20
30
y-o-
y %
cha
nge
Year
Japan South Korea Taiwan
2008
2009
2010 2011
Source; The LNG Industry, 2011 & 2011, GIIGNL
Three major LNG importing countries, Japan, South Korea and Taiwan (JKT), account for 53% global LNG trade in 2011.
JKT increase LNG import by 9.9% in 2011.
CPC CORPORATION, TAIWAN
Consumers Expectations
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More Supply
To meet increasing global demand, it requires more investment on LNG supply chain and unconventional production technology.
Government policy to encourage LNG export and import, including application of LNG as fuel for marine tankers and land vehicles.
Fair treatment to all importing countries and eliminate free-trade obstacles.
More Flexibility
Diverse gas price indexation, oil-linked and gas-linked, to allocate risk of pricing fluctuation.
More flexibility on destination to invigorate market.
More Supply & More Flexibility = More Competition
CPC CORPORATION, TAIWAN
• LNG/NG plays a critical role in the global energy market as the primary alternative for crude and nuclear.
• Taiwan’ s new energy policy promotes LNG utilization.
LNG demand steadily increases
• Qatar & Australia are major supply countries for its abundant natural source and stable environment.
• Asian market is looking forward to US and Canada LNG without trade restriction.
More LNG supply is expected
• For above purpose, support for and investment in LNG supply chain are continually required from government and LNG industry.
• LNG market is drastically changing; all players need more communication and cooperation.
Prepare for the coming Golden Age of Gas
Conclusion
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Thank You for Your Attention
