MIDDLE EAST GAS 22 DOHA - APRIL 1-11, 22 The Market for LNG Vessels - Current and Future By Ian Walker, Gas Business Development, Golar LNG Ltd.
Agenda 1. Golar LNG 2. The LNG market. Supply Demand Balance. Conclusions
Golar LNG Ltd. World s largest independent LNG shipowner (1 ships including on order) Present in both Atlantic and Pacific basin Listed on Oslo stock exchange in May 21, will be listed in US within Q2 22 Actively pursuing additional opportunities upstream and downstream in the LNG chain (trading, regas)
The Golar Strategy 1. To be a shipowner that charters out LNG tonnage for various periods to the market in general. 2. To be an LNG trader that buys LNG FOB from various sources either alone or with a partner, and sells gas to LNG customers all over the world. As part of the trading activity, Golar will consider investing in other parts of the LNG chain, like liquefaction or regasification capacity.. To be an LNG development/construction company that invests in or develops new concepts like floating regas or liquefaction units.
Agenda 1. Golar LNG 2. The LNG market. Supply/Demand Balance. Conclusions
Gas Consumption Percent 1 1 12 Average growth rate (2 1) Taiwan China India growth expectations 1bcm p.a. 2bcm p.a. 5bcm p.a. Current LNG users Likely LNG users By segment Industrial and commercial,8 1 8 2 Portugal Spain Bangladesh Singapore South Korea Qatar Iraq Jordan Thailand Paki stan Australia Iran Saudi Arabia Mexico Indonesia Italy Belgium/ Luxembourg Malaysia UAE Kuwait Egypt Poland France Netherlands Japan Canada Germany 2 8 1 12 UK US Power generation Domestic 2, 2,5 Weighted average.1% Year 2 consumption (bcm)
Global LNG Trade Flows (Long Term) Alaska Lake Charles Everett Atlantic Basin Trinidad & Tobago Algeria Nigeria Turkey U.A.E./ Qatar/Oman India Taiwan Japan Indonesia/Malaysia/ Brunei Asia/Pacific Basin Australia Import Terminal Export Terminal
Large Arbitrage Opportunities main Market Areas different price setters:march 22 Henry Hub Gas Price = $2.87 IPE NBP price = $2.18 Brent 1%=$.25 Japan LNG Av. Import Price = $. Import Terminal Export Terminal
Agenda 1. Golar LNG 2. The LNG market. Supply/Demand Balance. Conclusions
Regas Projects ESTIMATE Terminal Capacity Start year LNG supplier* Existing Under construction 278.2.5 Everett expansion, MA Cove Point, MD Elba Island, CA Andres, Dominican Rep. Dabhol, India Chita Midorihama, Japan Tong Young, Korea Sines, Portugal Izmir, Turkey Terminal 2.5 7.2...9. 8. 1.8 2.9 Capacity 22 22 22 2 22 22 22 2 22 Start year Atlantic LNG Atlantic LNG, NLNG Atlantic LNG, NLNG Atlantic LNG Oman Asian/Middle East suppliers Asian suppliers Nigeria Qatar, Algeria LNG supplier * ESTIMATE Planned Total high probability capacity in 25 Prospective Total maximum potential in 25.9 55.7 28.7 8. Huelva expansion, Spain Suape, Brasil Dahej, India Hazira Cochin, India Bilbao, Spain Offshore GBS, Italy Guandong, China Cartagena expansion, Spain Valencia, Spain Japan Baja California Terminal 2.8 1.5 5. 5.. 2.1...8..2. Capacity 2 25 2 2 2 2 25 25 2 25 2 2 Start year NLNG Nigeria, Angola, Trinidad, Venezuela RasGas III NWS, Oman Qatar RasGas IV NWS, MLNG III Indonesia/NWS NLNG Egypt Indonesia Indonesia LNG supplier * * Source:Golar internal Hackberry, LA Florida via Bahamas Altamira, Mexico Recife, Brazil Pipovav, India Kakinada, India 5.7 5. 5. 2.1. 2.5 2 2 25 2 25 25 Atlantic Basin Atlantic Basin Atlantic Basin Nigeria, Angola, Trinidad, Venezuela Malaysia, Australia Malaysia, Indonesia
Liquefaction Projects ESTIMATE Existing capacity (as of 15 April 21) Under construction Planned Total high probability capacity in 25/ Prospective 129. 2.9 1 217.5 5. Under Construction Trinidad Nigeria Malaysia LNG III NWS IV Rasgas II Qatargas debott. In Progress Nigeria W. Niger Delta Angola Brass Rivers Qatar (Ras Gas II) Indonesia (Bontang I) Indonesia (Tangguh) Egypt Trinidad T Snøhvit Oman LNG Train no. Capacity 2+ 1,2 1, 2, Train no. +5 1+2 1 1 1,2, 1.7.8.2.7 1.5 Capacity 8 8.8.7 12 5 22 2 2 2 2 2 25 2 2 2 25 25 25 25 25 25/ 25/ Buyers* Spain, U.S. Spain, Portugal Japan, India Japan, China India Asia, Europe Buyers * Europe/US Europe/US Atlantic Basin Atlantic Basin Italy/spot U.S., China China/India France/US US/Europe US, Europe Europe/FE Ships committed 1 2 1 Ships committed 8 2 Ships needed 2 2 Ships needed 8 8 12 Total maximum potential in 25/ Source:Golar Internal 28.1 Proposed Australia, Timor Russia, Sakhalin Nigeria LNG T Snøhvit T2 Venezuel a Paria Peru/Bolivia Indonesia US West/Baja Capacity 12 1. 5 8 5 2 2 2 2/7 25/ 2 2 Buyers FE/US West Coast Japan, Korea, China Europe /US Europe/US US US West Coast/Baja US West Coast/Baja- Ships committed Est. Ships needed 8
LNG New Ship Supply Firm Golar LNG (1) Firm BG (1) MISC (2) Firm Firm speculative Bergesen (2) Exmar (1) Shell (2) BP (2) MISC (2) Naviera Tapias (1) Nigeria LNG (1) Elcano (1) Naviera Tapias (2) SCI/MOSK (1) NWS (1) NLNG (1) Knutsen (2) Shell (1) Lino Kaiun (1) GDF (1) Total Firm orders to 2 : 5 ships Firm Exmar (2) MISC (1) Nigeria LNG (2) Brunei Gas Carriers (1) Tepco (1) Tokyo Gas (1) SCI/MOSK (1) Lino Kaiun (1) Speculative Golar (1) Exmar (1) 2 Speculative: Golar (2) Bergesen (1) AP Møller (1) Firm MISC (1) Exmar (2) Bergesen () NLNG () Tokyo Gas (1) Tapias (1) BP (1) Shell(1) Firm Bergeson (1) 17 Tepco (1) 9 12 1 2 Source:Golar internal 22 2 2 25 2
Supply/Demand Balance Taking Production, Shipping and Regas Capacity coming on stream 22-2, this shows Regas Capacity Increase of c. % Liquefaction Capacity Increase of c. % Shipping Increase of c. 5% Even counting Delays we consider the market to be in reasonable balance
A New Era Old World Long-term bilateral trades with shipping capacity constraining trades Shipping constraints seen as bottleneck linking upstream expansion to promising new markets New World Entering dynamic growth period bringing greater geographic diversity of Buyers and Sellers More flexibleiinnovative sales arrangements Orders now placed for uncommitted capacity Trading patterns become less static with supply contracts tailored to a number of small buyers in a spread of locations Large buyers to buy from various sources on fob basis using due to emerging destination flexibility
Other Developments and Changes Spot Market? It has already happened in the Atlantic basin Evidence : 5 % of US cargoes in 2 were spot sales. 8 % of total LNG sold in 2 were spot sales. Companies are assembling asserts to take advantage of swap opportunities Distrigaz has re-routed LNG to US and substituted with European gas. Total Fina Elf has re-routed cargoes originally for the US to European destinations The plan of major LNG players based on increased spot trading. Japanese importers appetite for flexible offtakes & fob purchases
The Golar Approach Pursue a balanced approach to steadily grow the old world plus build new world business through bold, calculated moves Entry ticket is; uncommitted capacity focused management relations and reputation management expanded role in the LNG supply crain
Agenda 1. Golar LNG 2. The LNG market. Supply/Demand Balance. Conclusions
Conclusions From the foregoing we firmly believe that, the market is in a strong growth phase Shipping supply/demand is in reasonable balance The development of the Spot market will happen/has happened and will drive a need for additional shipping capacity We therefore believe that because of our position and management strengths we are well placed to take advantage of these market qualities
Golar LNG Ltd. HHI Mark III Technigaz Membrane Delivery : October 2 Total Capacity : 1,sm