IENE Workshop “Energy Security in SE Europe and the Role ...
Transcript of IENE Workshop “Energy Security in SE Europe and the Role ...
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IENE Workshop “Energy Security in SE Europe and the Role of LNG”
Athens, 4 & 5 July 2017
“Global LNG trends and perspectives”
Spyros Paleoyannis Managing Partner
MEDGAS & MORE SERVISES Ltd Ex-CEO DEPA SA
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• An introduction
• The dynamic role of LNG
in the global gas market
• Liquefaction plants
• LNG re-gas terminals
• LNG fleet
• The new landscape in the
global gas/LNG market
Presentation Contents
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Oil “shocks”, technology and climate change policies have brought serious changes
in the global energy mix
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Global gas demand will continue to increase, although with a different growth pattern
in each region
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But, neither the industry nor the gas markets will be the same in the years to come
Source: PWC Strategy & analysis: Navigating the transformation of the gas market, 2016
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Drivers of change
• Much of the expected demand growth will be cover by LNG, since LNG grows 7 times faster than pipeline gas trade (BP 2017 Energy Outlook)
• This reality have led to an LNG supply glut (mainly came from US and Australia) which is expected to be absorbed only by mid of ‘20
• LNG oversupply along with structural changes in LNG contracts and trade (resulting in higher flexibility, liquidity and diversity) and the convergence of LNG prices worldwide contribute to the creation of a real global gas market
• Certain technological achievements across the LNG value chain (FLNGs, q-max ships, FSRUs, small-scale LNG applications in transport and bunkering) resulting in further enhancement of the LNG role both in traditional and new markets
• There will be a growing role of gas in the future energy mix as “transition” and ‘back-up” to RES fuel (at least in Europe) and thus flexible LNG will gain increasingly importance
• Given the climate change policies, all players in the gas industry, from up-streamers to mid-streamers (owners of pipelines, re-gas facilities and UGS) and gas users (power plants etc.) should adopt decarbonization strategies in order to survive in the long-run. The argument that gas has the lower CO2 emissions among the fossil fuels is no-longer enough
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LNG will continue to gain share in global gas trade
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…and to contribute in the creation of a real global gas market
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LNG Supply & demand outlook to 2035
Source: BP 2017 Energy Outlook
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Changing drivers of LNG demand growth
Source: SHELL LNG Outlook 2017
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Key figures of the LNG industry in 2016
• The total LNG tanker fleet consisted of 478 vessels at the end of 2016 • The total FSRU fleet consisted of 24 units at the end of 2016
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World map of NG liquefaction plants( total nameplate capacity 340 mtpa)
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Average Liquefaction Unit Cost (in real 2014 $/tn)
Source: IGU World LNG Report 2017
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Source: IGU World LNG Report 2017
Average Liquefaction Unit Costs (in real 2014 $/tn) by Region and Type of Projects
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A number of FLNG Projects is under construction
SHELL’s Prelude FLNG is the world’s largest floating vessel with a capacity 3,6 mtpa/y. Its dimensions are L 488 m x W 75 m x 105 H Last week started its journey from Samsung shipyard to offshore Prelude gas field, Australia
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Re-gas terminals import capacity and utilization rate by region/country
Source: IGU World LNG Report 2017
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LNG regasification terminals in Europe(GLE Map)
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Hoegh’s FSRU Gallant in Ain Sokhna, Egypt
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Onshore LNG Terminals vs FSRUs
Source: IGU World LNG Report 2017
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Onshore Terminals costs vs FSRUs costs(IGU World LNG Report 2017)
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Source: IGU World LNG Report 2017
2015-2016 LNG Shipping in Review
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Evolution of Estimated LT and Spot Charter Rates in $/day
Source: IGU World LNG Report 2017
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Evolution of LNG trade (1990-2016)
Source: IGU World LNG Report 2017
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Evolution of gas/LNG prices
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Emerging trends/models in LNG Contracts & Trade
• Reduction in average contract length and contract volumes
• Rise of destination free and volume flexible LNG contracts (US LNG)
• Increasing role of LNG ‘intermediates’ (Portfolio Players and LNG Traders)
• Growing number of LNG contracts with hub indexed price mechanisms
• Due to LNG oversupply, buyer’s bargaining power have increased and thus they are gaining influence over certain contractual terms
• Similarly, due to LNG glut, sellers are forced to accept lower buyers’ credit quality
• Rising number of transactions on a short-term and/or spot basis
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SE Europe (and Greece) is set to become a new gas/LNG entrance to Europe
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Greece in particular has certain advantages to host a regional traded gas hub