NATURAL GAS MARKET AND ITS PRICING IN JAPAN,KOREA & TAIWANRUHILIN NASSER. NURSUHAILE AHMAD. ZULFIQAR ROSNAN

NATURAL GAS MARKET OVERVIEW

Overview• Japan is the world's largest liquefied natural gas (LNG)

importer• Second-largest importer of coal behind China.• Third-largest net importer of crude oil and oil products

in the world behind the United States and China.• Japan has limited domestic energy resources that have

met less than 9% of the country's total primary energy use since 2012.

Gas Demand

Gas Import Dependency• Japanese gas demand is mainly

supplied by imports in the form of LNG.

• Natural gas supply sources to the country are widely diversified.

• In 2012, Australia was the largest supplier, representing 20% of total imports. Qatar (17%), Malaysia (16%), Russia (10%) and Brunei (7%) are other key gas supply sources for Japan.

Gas Supply Infrastructure - Pipelines• Japan has no cross-border gas pipelines. Total gas pipeline length

accounts for 249 786 km through the country. • Around 86% of gas pipelines are low-pressure grids for local

distribution, while only 14% are for high pressure (4 772 km). • Although there are around 43 main interconnection points

between areas, the trunk line networks are not necessarily connected to each other as they have developed separately around LNG terminals.• There is no single operator of the national transmission system in

the country, as the trunk line networks are not necessarily connected each other. Each industry (mainly electricity utilities and city gas companies) owns and operates its gas pipelines.

NATURAL GAS PRICINGJAPAN

NG pricing• The import price for Japan remained in a $ 15-16 /MMBtu range in 2014,

though the prices declining• LNG import value increased further due to the weakening yen• The import price in 2016 is forecast to fall to around $ 10/MMBtu due to crude

oil price drops.

Majority sales conduct by major company• There is about 209 gas-based

companies across Japan.• 70% of all domestics gas are

conducted by this 4 major companies :• Osaka gas• Tokyo gas• Toho gas• Saibu gas

Natural Gas Market Overview

Overview

South Korea was the world's 9th largest energy consumer in 2014,

the 5th largest importer of crude oil, the 3rd largest importer of coal, the 2nd largest importer of liquefied natural

gas (LNG) after Japan

Total Primary Energy Consumptionhas no international oil or natural gas

pipelines relies exclusively on tanker shipments of

LNG and crude oilpetroleum and other liquids, accounted

39% trend is attributed to the steady

increase in natural gas, coal, and nuclear energy consumption which has reduced oil use in the power sector and the industrial sector

Natural Gas Consumption

consumed an estimated 1.7 trillion cubic feet (Tcf)

Power generators used more coal and nuclear power starting in 2014

as nuclear facilities returned to service following a shutdown because of safety problems and as coal prices dropped

Sector Organization

• Korea Gas Corporation (KOGAS) dominates South Korea’s wholesale natural gas sector, and the company is the largest single LNG importer in the world.• n the upstream sector, KOGAS has focused primarily on overseas

LNG liquefaction projects, while the KNOC has handled most exploration and production-related activities. 

Liquefied Natural Gas

imported 1.8 Tcf of LNG, which was 15% of the global LNG trade

Almost two-thirds of 2014 LNG imports came from Qatar, Indonesia, Malaysia, and Oman

Indonesia was South Korea’s first source of LNG

Application of LNGwas first imported as an alternative energy source for power

generation in 1986.decided to supply natural gas to the general public to meet the

growing needs of clean energy.In 2010. the share of gas used in the power generation will shrink

to about 38.6 %, while the share of city gas will grow up to 61.4 % of the total gas demand.

mostly used for heating and cooking

Natural Gas PricingKorea

LNG PricesSouth Korea's LNG import prices averaged $678.52/mt ($13.05/MMBtu) in March

2015

Natural Gas Market in Taiwan• Taiwan was the world’s fifth largest importer of LNG, with imports sourced

mainly from Indonesia and Malaysia under long term (20 year) contract.

• The state owned Chinese Petroleum Corporation (CPC) currently controls all aspects of natural gas supply in Taiwan, including exploration, production, imports and wholesale sales.

Natural Gas Market in Taiwan

Natural Gas Market in Taiwan

Natural Gas Market in Taiwan

Natural Gas Market in Taiwan

Natural Gas Market in Taiwan

Natural Gas Market in Taiwan

LNG PRICINGTAIWAN