2011 Institute of Energy Economics, Japan - IEEJ

Transcription

1 A Changing World of LNG Pacific Energy Summit: Unlocking the Potential of Natural Gas in the Asia-Pacific Session 2: Market Evolution and Adaptation: Contracts, pricing mechanisms, and supply security in Asia Tuesday 22 February 2011, Jakarta, Indonesia Hiroshi Hashimoto, Institute of Energy Economics, Japan - IEEJ 1

2 An LNG revolution is underway Economic driver Shale gas revolution - Higher prices of oil and energy - Price gaps LNG revolution - Higher prices of oil and energy - Price gaps Technology factor Implication - Advancing drilling technology - LNG export proposal from the United States Energy substitution - Advancing LNG technology and increasing size - Floating solutions - Unprecedented expansion of LNG markets 2

3 Existing and expected changes of the LNG world 2 Unprecedented expansion of the LNG market The hybrid structure of the Asia Pacific market Emerging LNG markets in Southeast Asia, Middle East, and South America Evolving roles of LNG Past Present Future Growth rates: LNG > gas as a whole > total primary energy Simple trade flows from Southeast Asia and Australia to North Asia s traditional buyers Standalone and smallscale pipeline gas markets, with some LNG exports LNG provides long-term security of supply and demand. LNG represents a premium energy source. LNG continues growing faster than gas as a whole, although representing less than 10% of the total gas Emerging markets joins traditional markets as core buyers to underpin new supply project development Fast-track LNG import projects with LNGRVs and FSRUs to meet rapidly growing local gas demand LNG is a clean and affordable essential energy source. LNG transmits price signals between regional gas markets. LNG is expected to expand its share in the total gas trade New emerging markets (Southeast Asia) develop into a production and consumption center Gas market sizes catch up with and surpass those of some OECD members LNG promotes increasing use of natural gas (in different regions and applications). LNG acts as a balancer between markets. 3

4 Issues to watch in the international gas and LNG markets 1. A revolutionary expansion of North American shale gas production how far will it go? 2. A concurrent massive expansion of LNG supply capacity how quickly the world markets can absorb the increment production 3. How long the supply long situation will continue what will change the situation 4. Possibility and timing of large-scale development of unconventional gas outside North America 5. How gas pricing mechanisms will evolve 4

5 Unprecedented jump in LNG production 4 3,500 3,000 Natural gas grows faster than other energy sources. LNG has had higher growth rates , , , , Natural gas production in the world (blue bars) (bcm) LNG production in the world (purple bars) (bcm) World gas production [Data Source] Natural Gas Information 2010, International Energy Agency, provisional figure for 2010, projection for 2011 LNG 5

6 LNG trade flows are diversifying 5 Source: Trade statistics and media information 6

7 LNG import capacity increases in the United States but volumes do not Capacity Imports Re-export Unit: million tonnes [Data source] imports: United States Department of Energy; capacity: 2011 Institute company of Energy information Economics, Japan - IEEJ 7

8 Diverging LNG prices in Japan - changes since USD Alaska Brunei Abu Dhabi Indonesia Malaysia Australia Qatar Oman Egypt Nigeria Algeria Trinidad Equatorial Guinea Norway Russia Average JCC Source: Trade statistics of Japan 8

9 Price convergence and divergence - an example in China (million tonnes) China's LNG Imports ( ) (USD/mmBtu) Australia Indonesia Malaysia Qatar Russia Abu Dhabi Oman Yemen Egypt Algeria Equatorial Guinea Nigeria Belgium Trinidad and Tobago Average Price Australia Indonesia Malaysia Qatar Russia Abu Dhabi Oman Yemen Egypt Algeria Equatorial Guinea Nigeria Belgium Trinidad and Tobago Source: Trade statistics of China 9

10 LNG in the 20 th and 21 st centuries LNG as... The most expensive fossil fuel A less expensive alternative to oil, and pipeline gas Importers Exclusive club, mostly OECD members Affordable to emerging economies Players Sellers, buyers, transporters Players have multiple roles, integrated business models Value chains Parallel, point-to-point Multiplied chains and points Finance Based on integrated supply chain Some projects are financed with looser commitment Regions Middle East Projects Pacific and Atlantic independent to each other. Middle East annexed to Pacific. Distant from any major consuming centres Supplemental LNG supplier to other regional market Capital intensive, bigger and bigger Closer linkage between regions. Middle East (and some others) supply to global. Conveniently located to supply any global markets Supplier to global markets, as well as significant energy consumer Even more super giant, but also small-scale models emerging Gas fields Large, easy to tap Frontier, difficult to exploit 10

11 Southeast Asia is depending on gas 10 Unit: bcm Natural gas consumption in Asian economies Gas consumption in Southeast Asia surpassed Japan at the end of the 20th Century. China's consumption is likely to be larger than Japan. Southeast Asia China India Japan [Source] Natural Gas Information 2010, International Energy Agency