ICIS China Gas Market Webinar

Transcription

1 ICIS China Gas Market Webinar 13 November 2014 Ricki Wang, Senior Industry Analyst ICIS China Ben Wetherall, Head of Gas ICIS Energy Click here to access the recording of the webinar -

2 ICIS Market intelligence for the energy, chemical and fertilizer industries

3 You can rely on ICIS to stay up to date with the latest developments in China natural gas Reliable pricing information The ICIS China Gas Markets Report enables you to understand price drivers and fluctuations and settle your contract prices more confidently by giving you access to delivered and import LNG prices as well as information on shipping information, market moving news, operating rates and turnaround schedules. Comprehensive supply and demand data and analysis The ICIS China LNG Supply/Demand & Investment Opportunities Report provides detailed information on the LNG demand outlook for China broken down by 24 key provinces, autonomous regions and municipalities. In addition, it provides important information on domestic policies, infrastructure developments and other key factors for consideration when making investment-related decisions. Request a sample report >> Enquire about the report >>

4 Content Overview of China s Gas Market

5 China s Energy Mix China s Energy Mix ( ) Under environment pressure, Chinese government is encouraging clean energy usage. Natural gas consumption is going to reach 15% of total primary energy mix by % 90% 80% 70% 60% 50% 40% E 2020E Coal Petroleum Natural Gas Non-fossil Energy Source: NBS, ICIS C1 Energy

6 China s natural gas Supply and Demand Forecast of China s Natural Gas ( E) 400 bcm 25% 20% % % % % 10% % % E 2015E 2016E 2017E 2018E 2019E Source: ICIS Net Import Export Production Consumption Growth Rate

7 Gas Consumption by region in 2012 Heilong jiang Xinjiang Uygur autonomous region Gansu Qinghai Inner Mongolia autonomous region Ningxia Shanxi Beijing Tianjin Hebei Shandong Liaoning Jilin Tibet autonomous region Sichuan Shaanxi Chong qing Guizhou Hubei Henan Hunan Jiangsu Anhui Jiangxi Fujian Zhejiang Shanghai Yunnan Guangxi Guangdong Consumption volume: Large Small Hainan Macao Hong Kong Source: ICIS C1 Energy 7

8 LNG Consumption by region in 2013 Large Small

9 Gas Distribution Forecast of China's Natural Gas Consumption by Sector ( E) 100% 80% 60% 40% 2013 China s NG consumption by Sector 20% 0% Source: ICIS C1 Energy 2013E 2014E 2015E 2016E 2017E City gas Industrial/Commercial fuel Chemical feedstock Fuel for power plants 29% City Industry 35% Gas 14% Fertilizer Gas Power Plant 22%

10 Domestic Gas Supply

11 Domestic Natural Gas Supply Forecast of China s Gas Production ( ) 180 bcm 18% % % 12% 10% 8% E 2015E 2016E 2017E 2018E 2019E 6% 4% 2% 0% Source: ICIS Production Growth Rate PetroChina is the largest gas supplier Most of the conventional gas belongs to PetroChina, Sinopec, CNOOC C. China NW. China N. China S. China SW. China E. China PetroChina CNOOC Sinopec Yanchang Petroleum Group

12 Unconventional Gas Development Supply target set by China government (2015, 2017) 2015 billion cubic meters Import LNG 14% SNG 4% CBM Shale Gas 3% Conventi al Gas 57% Import Pipeline 18% 20 0 Conventio nal Gas Import Pipeline Gas Import LNG SNG CBM Shale Gas % 5% % % Source: ICIS C1 Energy 14% 19%

13 Unconventional Gas Distribution SNG Shale Gas SNG Shale Gas CBM Northern China North East China East China Southern China Central China South West China North West China Shale Gas Shale Gas

14 Gas Import in China

15 China s Gas Import Forecast of China s Gas Import ( E) China s Gas Import ( E) bcm % % 18.6% 18.8% E 2015E 2016E 2017E 2018E 2019E Source: ICIS Import Growth Rate 350% 300% 250% 200% 150% 100% 50% 0% 10,000 tonne E Source: GAC NG Import LNG Import Annual Growth Rate 350% 300% 250% 200% 150% 100% 50% 0%

16 Gas Import Infrastructure China Russia Gas Pipeline East-West P IV East-west P II East-West P III Tianjin Tangshan Dalian Qingdao Rudong Shanghai Ningbo Zhoushan JOVO Putian 来源 : 安迅思息旺能源 Myanmar Gas Pipeline Guangxi Shenzhen Zhuhai Hainan Import LNG

17 Gas Import by Source ,000 tonne E Source: Gac Qatar LNG Australia LNG IndonesiaLNG Malaysia LNG Other Countries LNG Turkmenistan Others

18 Import Gas Price 20 $/MMBtu Qatar Import LNG price Australia Import LNG price Indonesia Import LNG price Malaysia Import LNG price Other Countries Import LNG price Turkmenistan Pipeline Import price Other Pipelien Import price E Source: GAC

19 Content Price Reform

20 Evaluation of China s Gas Pricing Mechanism Government Set and Guide the Price Hub Price Price Reform Two Tier Pricing + Base on Cost Two Tier Pricing Base on Cost Base on Cost Market Orientation Before After 2020

21 Price Formula Coefficient Thermal Value VAT Import Price Import Price

22 Regional Gas Price Government-capped City-gate Prices of Natural Gas by Province/Municipality/Region Province/Municipality/Regio n Price for existing consumption Price for outstanding consumption RMB Yuan/cbm USD $/MMBtu RMB Yuan/cbm USD $/MMBtu Beijing Tianjin Hebei Shanxi Inner Mongolia Guangdong Guangxi Heilongjiang Shanghai Jiangsu Zhejiang Anhui Jiangxi Shandong Note: The price is inclusive of value-added tax (VAT). Source: National Development and Reform Commission

23 Impact of Price Reform Upstream Middle stream Supplier Import LNG Downstream LNG terminal Domestic LNG plant Pipeline Industry Gas Power Plant Vehicle Fertilizer

24 Government Policies Pipeline Gas Fertilizer Vehicle City Gas Gas Field Purify Pipeline City Gate Pipeline Upstream Transportation Commercial Domestic LNG plant Gas Power Plant Citizen LNG trucks Industry Gas refill station Downstream Vehicle

25 Government Policies LNG Vehicle City Gas Import LNG Shipping LNG terminal Pipeline Gas Power Plant Citizen Commercial LNG trucks Industry Gas refill station Vehicle

26 Content Chinese gas market reforms in a regional context

27 Chinese import requirements uncertain but will impact wider region Chinese domestic shale gas production uncertain. Government cuts targets 30Bcm by 2020 down from Bcm in original development plan. Imports from Turkmenistan set to reach 30Bcm in 2014, up to 65Bcm by Russia-China pipeline agreement via Eastern Route up to 38Bcm/year. Gazprom-CNPC sign framework agreement in Nov 14 for 30Bcm/year via Altai (Western Route). Chinese buyers have signed SPAs to import more than 50mtpa of LNG in 2020 China s LNG imports compared with NE Asia China LNG import s (mt) 6% end Sept China holds more than 50mtpa in LNG SPAs in % 24% 4% 6% 5% Chinese LNG imports as percentage of regional demand NE Asia % Australia Indonesia Malaysia Qatar Russia Portfolio Supply Papua New Guinea

28 New Russian pipeline imports competitive with LNG Selected LNG and pipeline import prices to China on forward curve (12 Nov 2014) LNG Prices - $/MMBtu US liquefaction DES Asia (Cheniere)* Qatar/China DES Russia-China (Shanghai delivery estimate) Australia/China 2011/12 source: ICIS, CME and NYMEX Australia/China CSG S-Curve * from Corpus Christi statement - March 2014

29 Japan tries to align liberalisation and lower price goals

30 Chinese price reform raises questions for new contestable LNG supply East Africa Eni and Anadarko developing multi-train project in Mozambique. Eni also plan 2.5mtpa FLNG project offshore Area 4 CNPC holds a 30% stake in Eni-led consortium developing Area 4. North America Australia/Russia Nine liquefaction projects at various stages of development in Western Canada have been given export approval PetroChina and Sinopec stakeholders in two LNG projects Cost challenges and uncertainty over royalty tax Regulatory issues over Western US greenfield projects Australian greenfield and FLNG projects under costs pressure Browse, Bonaparte, Scarborough Russian LNG (Sakhalin expansion/vladivostok, Yamal LNG) questions over financing, technology.

31 You can rely on ICIS to stay up to date with the latest developments in China natural gas Reliable pricing information The ICIS China Gas Markets Report enables you to understand price drivers and fluctuations and settle your contract prices more confidently by giving you access to delivered and import LNG prices as well as information on shipping information, market moving news, operating rates and turnaround schedules. Comprehensive supply and demand data and analysis The ICIS China LNG Supply/Demand & Investment Opportunities Report provides detailed information on the LNG demand outlook for China broken down by 24 key provinces, autonomous regions and municipalities. In addition, it provides important information on domestic policies, infrastructure developments and other key factors for consideration when making investment-related decisions. Request a sample report >> Enquire about the report >>

32 Thank you very much Click here to access the recording of the webinar - For other enquiries, us at enquiry@icis.com Interested in our next webinars? Visit