The Global Natural Gas Industry

Transcription

1 The Global Natural Gas Industry Orlando CABRALES SEGOVIA Presidente de Naturgas, Colombia Regional Coordinator International Gas Union August

2 IGU Members serve 97% of the Worlds Gas Market 91 Charter Members 72 Associate Members Founded in IGU Presidency Korea IGU Secretariat Barcelona, Spain 2

3 Global Gas Report 218 Special Edition WGC218

4 Top 1 global gas developments in Russian production growth 4 European consumption growth 6 US production growth 9 Flexible tech. (Malta and Turke y FSRU) 2 Chinese consumption growth 6 New production (Zohr) 9 Flexible tech. (China SSLNG) Global highlights 3 Asian spot LNG price increase 1 Global consumption growth 1 First FLNG (Malaysia) 7 Global LNG market liquidity 8 Mozambique LNG FID 6 New production (Australia LNG)

5 217 developments in global gas Trade Region average Region Consumption Gas price Production Imports Exports Infrastructure Africa 6.7% - 8.6% -5.% 8.9% LNG liquefaction (Mozambique FID) Asia 5.3% +$1.1/MMBtu (Japan spot) 4.1% 1.% 1.6% Regional LNG liquefaction and regas; Chinese pipeline developments CIS 6.3% - 6.8% 6.9% 7.8% Russia LNG (Yamal) Europe 6.1% +$1.1/MMBtu (NBP) 1.9% 12.% 14.3% Pipeline development (TANAP) Latin America.4% -.1% -7.7% -7.7% No key developments Middle East 4.8% - 4.1% -3.7% -.1% No key developments North America -.8% +$.5/MMBtu (Henry Hub).5% 8.% 16.5% US liquefaction and cross-border pipelines

6 Unconventionals have been the key source of global gas production growth Global gas production growth by type Unconventional gas production by country Unconventional +1.8% bcm Conventional -.5% bcm 4, 8 3,455 3,527 3,531 3,261 3,339 3,421 3, , , , 2,85 2,849 2,864 2,849 2,799 2,82 2, Δ between Unconventional (%) US Canada China Australia Argentina Other countries 216 Source: Rystad data (Gas production), BCG analysis

7 Strong global gas trade growth in 217 led by US, Russia, and Australia exports Global gas trade by year 217 annual change in exports bcm 4, 3, 2, 1, % 22% 67% 216 total US 22.8 Russia 2. Australia 15.4 Norway 11.2 Nigeria 4.2 Angola 4.1 Iran 3.2 Malaysia 2.9 Canada 1.3 Turkmenistan 1.3 Kazakhstan 1. UK 1. Inra-Europe (other) Qatar -2.8 Netherlands -5.1 Other total % ,15 1,2 1,25 Intl LNG Intl Pipeline Domestic supply Pipeline LNG bcm Source: Cedigaz global trade data, BCG analysis

8 LNG capacities growing at 6% per year 4x global consumption growth Global liquefaction capacity bcm 1,2 1, 8 Global regasification capacity bcm 1,2 1, % % , , ,157 Liquefaction Utilization 1 (%) 81 Regasification Utilization (%) Decline driven by cap. increase in Asia/Oceania 3 and Africa 4 Decline driven by Europe and N. America 1. Liquefaction utilization = LNG Exports/Liquefaction capacity * 1 2. Regasification utilization = LNG Imports/Regasification capacity * 1 Source: CEDIGAZ data (Trade, Plants, Terminals), IGU, BCG analysis

9 In 217 gas prices rose in Europe and Asia vs. other fuels Oil, Gas and Coal prices in major reference markets North America Europe Asia $/MMBtu $/MMBtu $/MMBtu WTI HH US Coal 1 Brent NBP Eur. Coal Dubai NEA Spot Asia Coal 1. US coal price is Central Appalachia price 2. Rotterdam index 3. Australia coal Source: World Bank, Bloomberg, EIA, BCG analysis

10 Rapid gas growth expected to continue Gas is projected to be the fastest growing fossil fuel % Annual gas growth to based on key growth regions and se ctors... Share of growth by 24 38% Non-OECD Asia... enabled by key market Developments Economic development/growth 2% Middle East Increasing global gas supply #2 Source of global energy by 24 1% 9% 7% 16% Africa Industry Transport (Bunkers and N. Am.) Other Supportive government polici es

11 Requirements and measures to achieve global gas growth 1. Cost competitiveness 2. Security of supply 3. Sustainability 1A. Reducing LNG costs through the supply chain 1B.Pricing environmental externalities 1C. Development of local gas production 2A. Expanding gas pipeline and storage infrastructure 2B. More flexible LNG contracting 2C. Development of new access-enabling technologies 3A. Adoption of local air pollution policies 3B. Development of low carbo n technologies for gas 3C. Addressing the methane emissions challenge Industry action required Gov. action required

12 China: Multiple policy measures driving rapid growth of gas across all sectors Policies supporting gas consumption Gas consumption growth across sectors Coal boiler conversation to gas Target conversation of 2k coal boiler units to natural gas to meet local pol lution targets New residential connections Target to increase penetration from 35% to 85%, adding >12m new conne ctions Incentives for CNG/LNG for transport Discounts provided on prices in gas price formula Gas consumption of cars targeted to more than double from 214 to 22 New 5 year plan prioritizing gas power Targeting 44GW of new gas-fired capacity though also targeting 2GW of new coal capacity Gas consumption by sector (%) Other Transport 13% +4bcm 9% 7% +11bcm 1% 2% +11bcm 18% 12% +12bcm 13% 27% +17bcm 25% 21% +21bcm 24% Power Production Energy use Comm & Res Industry Source: CEDIGAZ data (Terminals and Plants), IEA data (Natural gas balance), analyst reports, BCG analysis

13 UK: Share of gas in power is growing following the increase in carbon price floor UK power generation capacity UK power generation capacity (GW) 15 Announcement of carbon price floor in 211, set at 18/T from 216 UK power production by source UK power production (TWh).4 Gas-fired generation increased by 4% in 216, replacing coal s hut downs Complete coal p hase out expecte d around All renewables Nuclear Gas Coal Oil Other Hydro Wind & Solar Other Renewable Nuclear Gas Coal Oil Other Source: IEA, Ofgem, BCG analysis

14 Opportunities and requirements for gas in cities Gas provides specific advantages for cities but requires multiple enablers Air pollution: nearly zero sulphur dioxide, nitrogen oxide, and no particulate matter emissions GHG emissions: 4% less than coal and 2% less than oil Heat intensity: Most heat intensive (and thus highest eff iciency) fuel source Scalability: Ease of adding customers to existing networks once infrastructure is developed Infrastructureinvestment of $34-55B/ yr in gas midstream Scaling up consumption over time, starting with large scale anc hor customers in industry and power generation Technological innovation to expand gas applications and enable sustainability goals Government policies enabling consumption, particularly for reducing air pollution

15 Thank you