World LNG Report industry trends-

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1 World LNG Report-218 -industry trends- Satoshi Yoshida General Manager, International Section, Policy and Planning Department Japan Gas Association

2 International Gas Union (IGU) Who we are Founded in 1931, Represents More Than 16 Member Organizations and Corporations of the Global Natural Gas Industry from 9 countries Represents over 97% of Global Natural Gas Market Objectives: To Serve As the Global Voice of Gas and Seeks to Improve the Quality of Life by Advancing Gas as a Key Contributor to a Sustainable Energy Future. 2

3 IGU Publications World LNG Report Whole Gas Price Survey, 218 Edition Case study in Improving Urban Air Quality Third Edition, March 218 Best Practices in Governance and Regulation The Importance of Methane Emissions Mitigation Social License to Operate: Case Studies Natural Gas Fuel of choice towards clean mobility Gas People Index 218. Workforce Development Taskforce Report Natural Gas: the essential fuel for industry in a sustainable future and more The Natural Gas Industry Methane Emissions Challenge Understanding Methane s Impact on Climate Change IGU Wholesale Gas Price Report 217 Natural Gas Global Insights 217 Edition IGU World LNG Report Enabling Clear Marine transportation, March 217 and more Global Gas Markets Supporting Growth and Sustainability Case Studies Improving Air Quality, Second edition (European cities), November 216 IGU Wholesale Gas Price Survey, May 216 Case studies Enabling Clean Energies, April 216 IGU World LNG Report, April 216 and more.

4 218 World LNG Report Contents; LNG Trade Liquefaction Plants LNG Carriers (Shipping) LNG Receiving Terminals FLNG Looking Ahead Appendix To download the full report visit; www. 4

5 Australia, 56.2 US, 13.1 Qatar, 81 Angola, 3.7 Nigeria, 21.3 Malaysia, 26.4 Algeria, 12.4 Brunei, 7 PNG, 7.7 Russia, 11.1 Oman, 8.4 Egypt,.8 Trinidad, 1.8 Eq. Guinea, 3.6 Peru, 4.1 Yemen, Norway, 4.1 Indonesia, 16.2 UAE, 5.2 MTPA LNG Supply in 217 LNG supply grew 35.2 MT in 217 and reached MT. This increase was driven by higher production in Australia and US Source: IHS, IGU North America Europe FSU Latin America Wheatstne LNG Courtesy Chevron

6 China, 39.5 S. Korea, 38.6 Pakistan, 5.1 Spain, 12.2 Turkey, 7.8 France, 7.6 Taiwan, 16.8 India, 2.7 Portugal, 2.8 Italy, 6 Japan, 84.5 Kuwait, 4.3 Thailand, 3.9 Mexico, 4.9 Greece, 1.1 Poland, 1.3 Jordan, 3.4 Netherlands,.8 Brazil, 1.5 Malaysia, 1.4 Other, 1.2 Malta,.3 Dom. Rep., 1 Puerto Rico, 1 Argentina, 3.2 UAE, 2.2 Egypt, 6.2 UK, 4.9 MTPA LNG Demand in 217 LNG demand reached MT. China accounted for over one-third of net demand growth, rising by 12.7 MT by a strong enforcement of environmental policy Africa Asia Asia-Pacific Europe Source: IHS, IGU

7 MTPA LNG Exports by Region North America Europe FSU Latin America Africa Asia Pacific Middle East Asia Pacific region is still leading LNG export adding another 14MT totalling 113.5MT in 217. The Middle East remained the clear second-place Note: FSU = Former Soviet Union Source: IHS, IGU 7

8 $/mmbtu MTPA % Share Price and non-long term trade Seasonal tightness in the global LNG market is very possible.. Non long-term trade accounted for 3% of total gross LNG trade. Monthly Average Regional Gas Prices, 21-Jan.218 Non Long-Term Volumes, US (Henry Hub) German Border Price NE Asia Spot Price UK (NBP) Japan (based on LNG) Source: IHS, Cedigaz, US DOE Non Long-Term Trade % of Total LNG Trade (right axis) Source: IHS, IGU 4% 35% 3% 25% 2% 15% 1% 5% % 8

9 MTPA MTPA Forecast Global Liquefaction Capacity Build-Out / Capacity Utilization Post-FID Liquefaction Capacity Build-Out % Global Liquefaction Capacity % of Capacity Utilised (right axis) Source: IHS, Company Announcements Liquefaction Global capacity utilisation was 84%, up 2% from 216 From 217 to 223, it is forecast to increase by 28% to 46 MTPA largely thanks to the contribution of US capacity increase 9% 8% % 7% 36 6% 5% 4% 3% 2% 1% % Other Qatar Australia United States Source: IHS, Public Announcements 46

10 New Markets Global Receiving Terminal Capacity, MTPA was constructed in 217 and reached 851MTPA. FSRUs have played a larger role in allowing new markets to access LNG supply. Source: IHS, IGU, Public Announcements 1 FSRU CHALLENGER Courtesy MOL

11 $'/day # of vessels Shipping Average LNG Spot Charter Rates versus Vessel Deliveries, Global fleet added 24 vessels to reach Order book grew by 14, 4 of which were FSRUs Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 1 Charter rates averaged near-term low of $27k/day for ST and $44k/day for TFDE & DFDE. Vessels delivered (right) Steam DFDE/TFDE Source: HIS Markit 11

12 LNG Venus Osaka Gas Shipping Routes Major LNG Shipping Routes,

13 Looking Ahead The LNG Industry in Years Ahead How Will LNG Markets Balance in 218? Will LNG Contracting and Liquefaction FIDs Take Shape This Year? Could Demand in Mature Asian Markets Surprise to the Upside Again? What Strategies Will Be Used to Address Emerging Markets? What New Markets Will Begin Imports in 218? Will the Global LNG Market Move More Toward Commoditization or Consolidation? 13

14 Members of World LNG Report Task Force 218 Chevron, USA American Gas Association, USA Anadarko, USA Bureau Veritas, France Enagás, Spain ENH, Cameroon Gas Natural Fenosa, Spain GIIGNL, France KOGAS, South Korea Osaka Gas, Japan Toho Gas, Japan Consultant IHS Market to download visit; www. 14

15 The Japan Gas Association Thank you Satoshi Yoshida General Manager, International Relations, Policy and Planning Department Japan Gas Association (Charter member of IGU)