4 TH GAS FORUM. Jean Jaylet, Senior Vice President Strategy, Markets & LNG. May 30 th, 2016

Transcription

1 4 TH GAS FORUM Jean Jaylet, Senior Vice President Strategy, Markets & LNG May 30 th, 2016

2 THE LNG MARKET TODAY 2005: 143 MT 13 exporters 15 importers ~60 flows 2015: 250 MT 19 exporters 34 importers ~160 flows 2015 Top 10 Exporters Mt 2015 Top 10 Importers Mt Top 3 for both Exporters and Importers represent ~ 55% of respectively 2015 LNG supply & demand. 4th Gas Forum - May 30th,

3 DRIVERS OF CHANGES IN THE LNG MARKET INTERNAL FORCES & EXTERNAL PRESSURE Old World Now INTERNAL FORCES Upcoming US LNG FOB volumes are almost at fixed price Break-up of the traditional link between gas producer, liquefaction and marketing Evolution of contractual terms Weaker spot LNG prices EXTERNAL PRESSURE Oil prices halved in a year and under renewed pressure, challenging oil-indexation economics Energy demand growth challenged by slow economic recovery and by energy efficiency Potential mid-term LNG oversupply While the LNG market was already undergoing some changes, the conjunction of internal changes and external pressure has the potential to profoundly transform the structure of the market 4th Gas Forum - May 30th,

4 A LNG MARKET UNDER MUTATION WITH THE COEXISTENCE OF TWO WORLDS Market Size & Depth Low credit-risk FOB Spare regas capacity Variable Quantity Hybrid-indexation Physical Spot market is developing Higher credit-risk 100+ players New, smaller entrants & traders Shipping availability Costly infrastructure DES Oil-indexation Volumes under Long-Term contracts remain preponderant Captive Shipping Handful of large Buyers & Sellers Flexibility & Diversity While term contracts are needed to launch post-2020 LNG developments, many elements supporting the emergence of a spot market are gathering 4th Gas Forum - May 30th,

5 NEW LONG TERM DEALS ARE SMALLER IN SIZE AND SHORTER LT LNG Contracts Size Evolution LNG Contracts Length Evolution - Years (Min/Max/Avg) Total Mt 40 Average Mt Total Volume # deals Avg LT Contracts Size (RHS) 10 0 Source: GIIGNL, Total Market Intelligence Source: Total Market Intelligence THE AVERAGE SIZE OF LT DEALS HAS BEEN HALVED OVER THE PAST 3 YEARS. THE AVERAGE LENGTH HAS DECLINED FROM 20 YEARS ( 80S-00S) TO YEARS 4th Gas Forum - May 30th,

6 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 NEW LONG TERM DEALS ARE SMALLER IN SIZE AND SHORTER New LNG Contracts by Month of Signature vs. Oil Price Mt HH Oil-linked Hybrid/Unknown Brent Price MARKET CONDITIONS HAVE AN IMPORTANT ROLE ON THE CHOICE OF PRICE INDEXATION 4th Gas Forum - May 30th,

7 LNG POST-FID PROJECTS COMPETITION LNG SUPPLY Capacity under construction 130 MT of current Post-FID projects added in th Gas Forum - May 30th,

8 GLOBAL LNG BALANCE AN OVERSUPPLIED MARKET UP IN THE NEXT DECADE LNG WORLD LNG Supply vs Demand Bcm Europe to be the Last Resort Market Bcm Bcm oversupplied market Need for new LNG projects Mtpa Bcm Mtpa 800 Post FID Existing LNG Europe LNG Others Supply Demand Imbalance of the market on the short term, LNG projects to be sanctioned in th Gas Forum - May 30th,

9 A REAL IMPACT OF CARBON PRICE FLOOR EU ETS + 18 /TON TODAY - A TARGET PRICE OF 70/TON IN 2030 UK GERMANY LNG DEMAND Switch range and NBP Switch range and TTF /MWh NBP $/MBtu /MWh TTF $MBtu Thermal Power mix Coal Gas Thermal Power mix Coal Lignite Gas Source: Total Source: Elexon Source: European Energy Exchange In UK, coal is being impacted by carbon price floor since 2013, Gas represents in % of thermal mix against 38% in 2012 Germany has an over reliance on coal generation and EU ETS carbon price too low to trigger the switch 4th Gas Forum - May 30th,

10 LNG DEMAND LNG FSRUS OPENING NEW MARKETS... QUICK AVAILABILITY & OPPORTUNITY TO TAKE ADVANTAGE OF LOWER PRICES FSRU Fleet Development Annual LNG imports at floating regas terminals Mt Source : WoodMackenzie Source : WoodMackenzie The fleet has grown to 23 vessels since In 2015, FSRU imports accounted for 9% of total LNG trade. A further seven FSRUs (all purpose-built) have been ordered before early January th Gas Forum - May 30th,

11 «SMALL SCALE» NEW USES LNG DEMAND LNG Carrier Regas Terminal CNG Gas Network City Gas Distribution conventional Power Plant CNG network Small Scale Liquefaction Small LNG Carrier Small Terminal Regas LNG Bunker Vessel LNG bunker LNG Truck trailer LNG off-grid industry LNG L-CNG LNG or L- CNG station LNG / L-CNG netwotk new uses A new small scale market organized in 3 segments: LNG bunkering, off-grid industry and LNG network. Margin spread all along the value chain 4th Gas Forum - May 30th,

12 LNG INNOVATION: DRIVER OF ACCESSIBLE GROWTH MANY NEW LOCATIONS HAVE A UNIQUE OPPORTUNITY FOR CLEANER, FASTER GROWTH safe scalable smaller shipping.. new connectivity. flexible moveable less cost DEMANDG ROWTH ZONES flexible distribution. Partnerships to define the pace of growth for electrification, industry and transport 4th Gas Forum - May 30th,

13 LNG PROJECTS COMPETITION PRE-FID PROJECTS, STARTING LNG SUPPLY Cumulative yearly capacity offer MT Intense competition for projects starting prior MT of potential projects 4th Gas Forum - May 30th,

14 THE LNG MARKET TOMORROW (2035) LNG WORLD Top 10 Exporters Mt Top 10 Importers Mt Africa ~100 Mtpa 2015: 250 MT 19 exporters 34 importers 2035: 590 MT 21 exporters 43 importers By 2035, Australia in front of Qatar as a supplier. China becomes the first LNG importer in front of Japan, India is the 3 rd one. 4th Gas Forum - May 30th,

15 WORLD GAS DEMAND 2015/2035: ~ 1,7% / YEAR GAS WORLD North America Bcm/y CAGR15/35 1% Europe Bcm/y CAGR15/35 0% Asia Importers Bcm/y CAGR15/35 3% 1,000 1, ,000 LNG Exports 2015 North America: enough reserves to meet domestic demand and LNG exports LNG Imports Pipe Imports Regional Production Domestic Demand Europe: limited potential growth for gas (energy efficiency and competition with renewable/coal) Asia: LNG is essential to balance gas market despite increasing production and pipe imports 4th Gas Forum - May 30th,

16 Bcm GLOBAL GAS DEMAND AND SOURCES OF SUPPLY FASTEST GROWTH FOR LNG Gas Demand / Supply CAGR 15/25 CAGR 25/35 2,9% CAGR 15/35 1,7% Gas Supply % GAS WORLD CAGR05/15 5,7% 5,9% 4,4% 1,1% 1,4% 5,000 LNG Imports Pipe Imports Domestic Production Demand 1, , , , , , , By 2035, LNG market will size almost 600 Mpta and will have the same share as pipe imports. LNG will connect more and more tomorrow gas markets. 4th Gas Forum - May 30th,

17 THANK YOU FOR YOUR ATTENTION 4th Gas Forum - May 30th,

18 LNG BALANCE GLOBAL LNG BALANCE ~ +4,4% / YEAR COMPETITION AMONG NEW SUPPLY AREAS, WHILE ASIA PULLING THE DEMAND LNG Supply LNG Demand Bcm Mtpa Bcm Mtpa ~4,4% CAGR 15/35 Europe is absorbing the excess of supply in the coming years. After 2023, need for LNG projects from new supply areas to be sanctioned. Additional pockets of demand should appear mainly in Asia and MENA and in new uses such as bunkering. 4th Gas Forum - May 30th,