Revision of Flower Presentation for Doha Natural Gas Conference - January 2009

8/6/2019 Revision of Flower Presentation for Doha Natural Gas Conference - January 2009

http://slidepdf.com/reader/full/revision-of-flower-presentation-for-doha-natural-gas-conference-january-2009 1/16

LNG

What Will Be the Impact of Qatar’s SixMega-Trains on the Global LNG Market?What Will Be the Impact of Qatar’s Six

Mega-Trains on the Global LNG Market?

Andy Flower Independent Consultant

Andy Flower Independent Consultant

7th Doha Natural Gas Conference

and Exhibition

Doha, March 9th-12th 2009



LNG

LNG in 2008LNG in 2008

• Global LNG trade fell marginally in 2008, thefirst fall since 1980 & 1981• The problem was on the supply side with only

5 of the 15 exporting countries increasingtheir exports

• The reasons for the lower than expectedoutcome include – Shortage of Gas Supply: e.g. Nigeria, Indonesia,

Oman, Egypt

– Force Majeure: e.g. Nigeria, Algeria – Technical Problems: e.g. Norway, Australia NWSTrain 5

– Delays in Start-up: e.g. Qatargas II Train 1,Indonesia (Tangguh), Sakhalin



LNG

LNG Trade by Exporter 1964 – 2008LNG Trade by Exporter 1964 – 2008

0

40

80

120

160

200

1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008

NorwayEquatorial GunieaEgyptOmanNigeriaTrinidadQatar AustraliaMalaysiaAbu Dhabi

IndonesiaBruneiLibyaUSA - AlaskaAlgeriain

mtp

a

7.4%pa



LNG

Outlook for LNG Supply 2009 to 2012Outlook for LNG Supply 2009 to 2012

• 95.3mtpa of new production capacity now under construction scheduled to come on stream between 2009and 2012

Qatar 46.8mtpa

Indonesia 7.6mtpaRussia 9.6mtpa

Yemen 6.7mtpa

Malaysia 1.5mtpa

Peru 4.4mtpa

Australia 4.3mtpa

Angola 5.2mtpa

Algeria 9.2mtpa



LNG

Global LNG Supply from Plants in Operation and

Under Construction in January 2009

Global LNG Supply from Plants in Operation and

Under Construction in January 2009

0

100

200

300

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

Pacific Basin Middle East Atlantic Basin

inm

tpa

Inmtpa

11.9%pa



LNG

Firm and Flexible Markets for LNGFirm and Flexible Markets for LNG

• Firm – Markets which have to have the LNG supply and will pay the

price needed to secure cargoes

– Asia, southern Europe (Turkey, Spain, southern France,Portugal), Latin America, Caribbean, New England (USA)

• Flexible

– Markets with alternative pipeline gas supplies where price willdetermine whether LNG is imported

– USA (Gulf of Mexico, West Coast), UK, Belgium, Netherlands


http://slidepdf.com/reader/full/revision-of-flower-presentation-for-doha-natural-gas-conference-january-2009 7/16LNG

LNG Demand Outlook 2009-2012LNG Demand Outlook 2009-2012

• The increase in supply comes at a timewhen demand is weakening in most of the firm LNG markets

– Asian imports in 4Q08 down 5% comparedwith 4Q07 (and lower than 3Q08)

– Imports in firm European markets up by14% in 1H08 (compared with 1H07),

unchanged between 2H07 and 2H08 – Main increase in imports into firm markets

in the 2H08 has been in the new marketsin the Americas (Argentina and Mexico)


http://slidepdf.com/reader/full/revision-of-flower-presentation-for-doha-natural-gas-conference-january-2009 8/16LNG

Short-term Cargoes from the Atlantic Basin

Received by Asian Buyers in 2007 to

1Q2009

Short-term Cargoes from the Atlantic Basin

Received by Asian Buyers in 2007 to

1Q2009

0

1

2

3

4

5

1 Q 0 7

2 Q 0 7

3 Q 0 7

4 Q 0 7

1 Q 0 8

2 Q 0 8

3 Q 0 8

4 Q 0 8

1 Q 0 9

( e )

Korea Japan Taiwan India China Total Asia

Inmt



LNG

LNG Demand in Firm Markets and Global Supply

2007-2012

LNG Demand in Firm Markets and Global Supply

2007-2012

0

100

200

300

2 0

0 7

2 0

0 8

2 0

0 9

2 0

1 0

2 0

1 1

2 0

1 2

Asia Europe Americas Supply

inm

tpa

Inmtpa

Available for

Flexible Markets



LNG

Natural Gas, LNG and Crude Oil PricesNatural Gas, LNG and Crude Oil Prices

Jan 2008 to Dec 2010Jan 2008 to Dec 2010

Natural Gas, LNG and Crude Oil PricesNatural Gas, LNG and Crude Oil Prices

Jan 2008 to Dec 2010Jan 2008 to Dec 2010

0

5

10

15

20

25

J a n - 0 8

M a r - 0 8

M a y - 0

8

J u l - 0

8

S e p - 0 8

N o v - 0

8

J a n - 0 9

M a r - 0 9

M a y - 0

9

J u l - 0

9

S e p - 0 9

N o v - 0

9

J a n - 1 0

M a r - 1 0

M a y - 1

0

J u l - 1

0

S e p - 1 0

N o v - 1

0

US (Henry Hub) Spain Japan Brent UK-NBP

In$/MMB

tu

Actual Outlook at $50/Bbl



LNG

The Importance of Qatar – Incremental

Liquefaction Capacity 2008-2012

The Importance of Qatar – Incremental

Liquefaction Capacity 2008-2012

0

20

40

60

80

100

2009 2010 2011 2012

Qatar Rest of the Worl

inmtpa



LNG

Which Countries Will be the Drivers of

Supply Growth from 2013

Which Countries Will be the Drivers of

Supply Growth from 2013• It takes at least 48 months to construct a new

onshore liquefaction plant• Projects which have not yet taken a Final

Investment Decision (FID) can not start-upbefore 2013

• Over 270mtpa of new capacity at the planningstage to add to the close to 300mtpa inoperation or under construction

• Over 70% of the planned capacity is in four countries: Australia, Nigeria, Iran and Russia



LNG

Impact of “Credit Crisis”Impact of “Credit Crisis”

• Industry in “wait and see” mode• Reductions in commodity prices have not yetfed through to liquefaction plant costs

• Availability of credit not yet tested

• General view is that credit will be available for “good” projects but financiers will be morerisk averse – Proven rather than new technology – Financially strong partners

– Creditworthy buyers• Potential for FIDs to be delayed in the hope

that the outlook will become less uncertain



LNG

Global LNG Supply 2007 to 2020Global LNG Supply 2007 to 2020

0

100

200

300

400

500

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2 0 1 7

2 0 1 8

2 0 1 9

2 0 1 0

In O pera t ion in Ja n 20 09 Under Con st ruc t ion in Ja n 20 09P lanned

inm

tpa

Average Annual Growth1980-2008 7.4%

2008-2012 11.9%2012-2020 5.0%



LNG

Possible Global LNG Supply and Demand

2007 to 2020

Possible Global LNG Supply and Demand

2007 to 2020

0

100

200

300

400

500

600

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2 0 1 7

2 0 1 8

2 0 1 9

2 0 2 0

In Operation in Jan 2009 Under Construction in Jan 2009

Planned Forecast Demand

inm

tpa

Possible Shortfall120mtpa in 2020



LNG

LNG

Revision of Flower Presentation for Doha Natural Gas Conference - January 2009

Documents

Transcript of Revision of Flower Presentation for Doha Natural Gas Conference - January 2009