Sixth IEA-IEF-OPEC Symposium on Energy Outlooks

Transcription

1 Sixth IEA-IEF-OPEC Symposium on Energy Outlooks 16 February 216 IEF Headquarters Riyadh, Saudi Arabia Dr Patrick Allman-Ward Chief Executive Officer Dana Gas PJSC 1

2 Forward Looking Statement This presentation contains forward-looking statements which may be identified by their use of words like plans, expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including, but not limited to, statements about the strategy for growth, product development, market position, expenditures, and financial results, are forward looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company, its subsidiaries and its affiliates (the Companies ) referred to in this presentation cannot guarantee that these assumptions and expectations are accurate or will be realized. The actual results, performance or achievements of the Companies, could thus differ materially from those projected in any such forwardlooking statements. The Companies assume no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events, or otherwise. 2 2

3 Presentation outline Outlook for global gas supply Outlook for global gas demand Gas pricing dynamics Implications for MENA gas market dynamics 3 3

4 Unlike the oil industry, the global gas industry structure has no constraints to meet gas supply. Stimulation of global gas demand is key to addressing the near term glut. The global gas industry is significantly more open to Western capital investment than the oil industry No access % Kuwait Recently opened 7% Global gas resources Conventional and unconventional Limited access 21% c.81 tcm 24+ years of resources at current global demand levels Full access 72% Percentage of global gas production c.3.4tcm pa (12 Tcf) In contrast to gas, only ca. 4% of current global oil supply is open to Western capital investment owing to access being either completely closed or limited on restricted terms LNG production volumes (mtpa) Global LNG capacity build-up vs LNG demand Speculative (Pre-FEED) Proposed (FEED or awaiting final approval) ROW Construction (Received FID) US Construction (Received FID) Operation WM 215 Outlook IEA 215 Outlook BP Energy Outlook 235 Australian Government Outlook LNG Production volumes (bcm pa) Sources: BP Stats, EIA, LEA LNG database 4

5 Long term, global gas demand fundamentals appear to be robust. Can gas industry strive to achieve a greater share of future energy demand? Gas imports, bcm pa 1,2 1, Non-OECD LNG Non-OECD Pipe OECD LNG OECD Pipe 2-14 global gas imports OECD vs Non-OECD Sources: BP Stats, IEA 214 global LNG imports Argentina France 2% Turkey 2% 2% UK, 3% Spain, 5% Taiwan 6% India 6% Other 1% ~333 bcm pa (12 Tcf pa) China 8% South Korea 15% Japan 36% 214 Global primary energy demand by fuel 214 global gas demand by sector Other energy Other Other Hydro, 3% renewables, 1% sector % 12% Gas 21% Bioenergy 1% Nuclear 5% ~16 tcm pa Coal 29% Oil 31% Transport 3% Buildings 21% ~3.4 tcm pa (12 Tcf) Industry and petrochemicals 23% Power 41% 5

6 With its strong credentials over rival fuels, gas can and should stimulate more demand 1% 9% Energy use by sector and fuel 5.7tcme 3.3tcme 3.tcme 2.8tcme 1.9tcme Other renewables, 2% Biofuels, 3% Oil, 6% Other, 1% Coal, 4% Heat, 5% Heat, 5% Biofuels, 7% Electricity, 1% Biofuels, 3% Gas, 4% Electricity, 2% Environmental credentials (GHG emissions, particulates) Gas suitability vs rival fuels Power Building Transport Industry 8% Hydro, 6% Oil, 11% Oil, 11% Cost effectiveness (versus rivals) Nuclear, 13% Scalability ~ Share of sector energy use, % 7% 6% 5% 4% 3% 2% 1% Gas, 23% Coal, 47% Gas, 21% Biofuels, 29% Electricity, 3% Gas, 21% Electricity, 27% Coal, 29% Oil, 93% Gas, 26% Unspecified 54% Primary Energy Consumption (bcm gas equivalent) Reliability Maturity of technology ~ Primary energy demand 214 (% gas share in energy mix) 3,5 3, 2,5 2, 1,5 1, 5 5% +5% share of primary energy for gas would increase demand by >3 bcmpa 24% 6% 23% Renewables Hydro Nuclear Oil Coal Gas % Source: IEA Power generation by fuel Building energy use by fuel Industry energy use by fuel Transport energy use by fuel Other energy sectors China India Japan EU 6

7 Global gas pricing is moving towards spot markets as the Asian market liberalises Gas prices in the three hubs: unregulated free markets (US$/mmbtu) Natural gas prices (US$/mmbtu) Market based hub pricing Oil-linked pricing with small spot content Wellhead based hub pricing Potential global convergence towards spot market based gas pricing Legend: commodity prices US Henry Hub price UK NBP price Japan Corp LNG import price Japan spot LNG price 198s 199s 21s China LNG import Liberalisation Korea LNG import Liberalisation Singapore - Energy Trading Hub Japan Market Liberalisation ongoing SPOT GAS Oil-linked gas Source: Bloomberg 7

8 MENA gas demand is growing strongly. Is there adequate investment in the region to meet the demand growth? Gas consumption (bcmpa) MENA gas demand (bcm)* Other ME Kuwait Algeria Qatar Egypt UAE Saudi Arabia Iran Gas demand growth (2-214 CAGR) China 14.5% MENA 6.4% US 1% Gas use as share of total primary energy demand Middle East Coal 1% Hydro Other 1% % North Africa (Algeria + Egypt) Hydro 2% Other 1% 8 7 Supply demand balance of MENA overtime Exported production Re-exports Consumed Production Gas 51% Sources: BP Stats, IEA 16.6 mmboe/d Oil 47% Gas 56% 2.8 mmboe/d * Historical data for Tunisia and Libya unavailable Oil 41% Gas balance, bcm pa

9 To meet the growing gas demand in MENA, the region s gas pricing has to be attractive to investors 214 MENA gas demand by country gas demand (bcmpa) Iran Saudi Arabia UAE Egypt Qatar Algeria Oman Kuwait Bahrain Tunisia Libya Iraq Yemen Gas prices 216E 7 Gas Price, $/mmbtu Estimated MENA market gas price ranges Market prices (Feb216) 1 Algeria Saudi Arabia Kuwait Qatar UAE Oman Egypt Spot Henry Hub Spot NBP Asian LNG Source: BP Stats, BMI, IEA, Bloomberg 9

10 The futures market is an extrapolation of current price levels and is historically unreliable 1

11 THANK YOU Dana Gas PJSC P. O. Box 211, Sharjah, UAE rsingh@danagas.com Direct : Fax :