World National Oil Companies Congress – 24 June 2010 – London Dynamics of the LNG markets Philip OLIVIER President of GDF SUEZ LNG
Philip olivier's presentation slides from the 2010 World National Oil Companies Congress
Jun 12, 2015
Philip olivier's presentation slides from the 2010 World National Oil Companies Congress that took place in June in London.
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World National Oil Companies Congress – 24 June 2010 – London
Dynamics of the LNG markets
Philip OLIVIERPresident of GDF SUEZ LNG
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This presentation is not intended to provide the basis for any evaluation of GDF SUEZ or of any of its subsidiaries. Although GDF SUEZ uses reasonable care to include in this presentation information which it believes is up-to-date and accurate, GDF SUEZ makes no representation or warranty as to the adequacy, accuracy, completeness or correctness of such information nor does it warrant or represent that the presentation shall be complete in every respect. GDF SUEZ shall have no liability resulting from the use of the information provided in this presentation nor shall it have any liability for the absence of any specific information herein. The information may be changed by GDF SUEZ at any time without prior notice. Nothing herein may be considered as being an offer to purchase or subscribe securities. The name and logo of GDF SUEZ, as well as the name and logo of affiliated companies, that appear in this presentation are trademarks and trade names protected by national and international laws. The copyright on this presentation belongs to GDF SUEZ.
London - 24 June 2010
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Global LNG production - pre-crisisLondon - 24 June 2010
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London - 24 June 2010
Global LNG production - post-crisis
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First ever significant decrease in world natural gas consumption in 2009
Pre recession forecast • Pre recession
forecast : 2.6% p/a
• 3‐4 year delay to recover to 2008 global gas demand level
• Pipeline gas to recover in 2014/2015
London - 24 June 2010
6
Pipeline gas and LNG consumption – crisis and recovery : 2010-2015 Focus
• 2009 assumed gas overcapacity : ~ 100 BCM
• +1,6% yoy gas demand growth expected in 2010‐2015
• As LNG has to flow and find a home, world gas recovery may first absorb LNG, and then pipeline gas
100 BCM
(BCM)
CERA – GDF SUEZ analysis
London - 24 June 2010
Natural gas worldwide supply overcapacityin 2009
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2009 gas consumption decrease
Additional LNG capacity
2009/2008 supply overcapacity
50
10
12
12
Europe
N & S America
Asia
72
30 102
Hypothesis : 2008 supply/demand balanced year, no storage effect taken into account
(BCM) • 2009 assumed gas overcapacity of 100 BCM originates mostly from European consumption decrease and additional LNG capacity coming on‐stream.
Source: GDF SUEZ
London - 24 June 2010
(BCM)Asian natural gas demand decrease
Additional LNG contracted to Asia
Natural gas oversupply in Asia
LNG redirected to NA, SA and
ME
LNG redirected to
Europe
Source: GDF SUEZ
12
13
UK10
In 2009 :
• An additional 25 BCM is forced from the Pacific Basin to the Atlantic Basin
8
10 NA
25 14
11
London - 24 June 2010
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2009 Natural gas oversupply - Asia
2009 Natural gas oversupply – Europe
2009 European natural gas demand decrease
Additional redirected LNG
to Europe(BCM) In 2009 :
Significant impact of the crisis on the European natural gas market, and especially on the European LNG market
Oversupply absorbed by pipeline reduction, domestic production decrease and storage
9
50
11 63
Natural gas oversupplyto Europe
Source: GDF SUEZ
Additional contracted LNG
to Europe
2
London - 24 June 2010
9
2009 Natural gas oversupply – North America
2009 North American natural
gas demand decrease
Additional LNG to North America(BCM) In 2009 :
Minor impact of the crisis on the North American natural gas market (20 BCM oversupply vs 770 BCM of natural gas market, i.e. 2.6%).
Oversupply assumed mostly absorbed by storage
10
Natural gas oversupply
to North America
10
10 20
Source: GDF SUEZ
London - 24 June 2010
10
11
NBP and Henry Hub comparison
In a LNG surplus context:
• Market anticipates short term NBP/HH convergence, then slow divergence
• HH becoming price floor for NBP
Forward curves 2010‐2015
London - 24 June 2010
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12
European case example: UK LNG needs
• Reduction of UK domestic gas production: 31 BCM from 2005 to 2009
• UK LNG imports in 2009: 11 BCM(incl. 6 BCM from Qatar)
• UK LNG needs to accelerate as production decline expected to continue
Source : GDF SUEZ
London - 24 June 2010
12
13
Global LNG production and demand
• Strong sensitivity to pace of recovery creates huge uncertainties on total gas demand
• Current surplus assumed absorbed by pipelines
• New LNG capacities might be required in 2014 but some of the potential liquefaction projects will be further postponed
• In the short term, a long market, but in the medium/long term, a potential tighter market and a need for new capacities
100 BCM gas bubble
London - 24 June 2010
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London - 24 June 2010
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Changing supply/demand balance in Asia
• Asian demand growth: +5%/year in 2010‐2020
• Many buyers still waiting before contracting new LT supply
• In the short‐term: Asia will not be THE destination for flexible LNG
London - 24 June 2010
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Flexible & uncommitted volumes availablefor the Atlantic Basin
• About 35 MTPA available for the Atlantic Basin(incl. Middle East) between 2013and 2015
REDISCOVERING ENERGY
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London - 24 June 2010
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