Transcript TOP X (text)

Examining the Changing Face of LNG
15th Annual Flame
LNG Summit
Amsterdam, 9th March 2009
David Fuller
Global Head of LNG
RWE Supply & Trading GmbH
PAGE 1
RWE – A Vertically Integrated Energy Business
RWE AG (Group Center)
RWE Power
Germany‘s biggest
power producer &
among the largest
in Europe
RWE Innogy
The leading
European player in
renewable energy
activities
RWE Dea
A significant
exploration and
production
portfolio for
hydrocarbons
mainly in Europe
and North Africa
RWE Supply & Trading
Responsible for trading
and the commercial
optimisation of RWE‘s
non regulated gas
activities and our
European energy
business
RWE Energy
Sales and grid
company for
customers in
Continental
Europe
RWE npower
Responsible for
our UK energy
business
> Integrated business model: Strong presence along all parts of the energy value chain
> Stability and growth: Well-balanced portfolio of leading market positions in mature and
growing markets in Europe
> Vertical integration and portfolio optimisation across the value chain
RWE Supply & Trading
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RWE Upstream & LNG activities throughout the world
Snøhvit
Denmark
Poland
Wilhelmshaven
GasPort
Teesside
GasPort
Adria
Northeast
Gateway
LNG Fleet
Excalibur (traditional vessel)
Excelsior
Excellence
Excelerate
Gulf Gateway
Mauritania
Algeria
Libya
Egypt
Mina Al
Ahmadi
GasPort
Explorer
Express (due Q2 09)
Exquisite (estimated Q3 09)
Expedient (estimated Q4 09)
Bahia Blanca
GasPort
RWE Dea upstream activities
LNG production
Exemplar (estimated Q2 10)
RWE Supply & Trading
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RWE covers the entire gas chain – we will grow…
Exploration/
Production
Supply/
Trading
Transport
/
Storage
RWE Supply & Trading
RWE Dea
> Gas Reserves:
ca. 539 mboe*
(~ 78 bcm)
> Gas supply:
ca. 40
bcm**/year
> Transport
pipelines:
23,700 km
> Gas Production:
ca. 22 mboe/year
(~ 3.2 bcm/year)
> Gas trading
volumes:
ca. 90
bcm/year
> Gas storage
volume:
ca. 6.1 bcm
Distributi
on
Sales
RWE Energy (Europe)
RWE npower (UK)
> Length of the
distribution
pipelines:
92,800 km***
> Gas supply:
ca. 40 bcm/year
(supply of
customers and
power plants)
> Gas customers:
ca. 10.6 million
* mboe = million barrels oil equivalent; Reserves = proved and probable
** bcm = billion cubic meters
*** RWE will sell the gas transportation network in Germany
to an independent third party within the next two years
****Gas supply and customers are 53bcm/year and 12..5million when combined with
recent acquisition Essent
RWE Supply & Trading
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…and LNG plays an important role in our growth story
RWE Procurement of gas
[bcm/a]
60 bcm/a
More RWE
production
New suppliers
Caspian / Middle
East
40 bcm/a
RUS
Contracts
expiries
> Pipeline gas will contribute to new
RWE supplies and there is also no
doubt that LNG will also be a major
contributor. Hence, secure access to
LNG plays a key role in our strategy
> RWE is a leading company in the
development of new pipeline routes
into Europe (Nabucco)
D
UK
NL
NOR
2006
> RWE has the goal of increasing the
gas supply base from approx. “40
bcm/a today to 60 bcm/a” by the year
2013
2013
> Our investment in Excelerate provides
synergies between RWE´s upstream
activities and the world´s LNG
suppliers and RWE´s huge
downstream market
RWE Supply & Trading
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The LNG business is seeing a worldwide period of
unprecedented expansion…
Bcm
Global Natural Gas Demand and LNG’s Share
4,000
Asia Pacific
Africa
3,000
Middle East
Europe & Eurasia
2,000
South & Central
America
1,000
7%
7%
0
2003
13%
13%
15%
17%
17%
North America
Global LNG
2010
2015
2020
Fundamentals:
> LNG supply will increase from 262 bcm today to 341 bcm in 2010
> Capacity of global LNG shipping will increase by more than half by 2010. 2008 will see a
record level of LNG-ships delivered – 58 ships added to existing fleet of 251
> CERA estimates that 40% of LNG supply under construction is non-dedicated and flexible to
trade. Growing regasification network will allow arbitrage
Source: CERA
RWE Supply & Trading
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LNG Flows in 2008
Norway
U.S
N. Africa
Trinidad
Middle
East
W. Africa
S.E Asia
Australia
LNG Markets
Supply Flows
High Oil Prices made LNG attractive to Asian Buyers
Oil parity was attained by Sellers
Surging economies created gas demand
Cargoes could easily be diverted from other regions
Delays in liquefaction projects
2008
New Sources in 2008
Project
Start Date
Capacity (bcm)
Australia NW Shelf T5
2008
5.8
RWE Supply & Trading
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Changes in LNG flows
Norway
Russia
U.S
N. Africa
Trinidad
Middle
East
W. Africa
S.E Asia
LNG Markets
Australia
Supply Flows
2008
Supply Flows
2009
New Sources in 2009
Project
Russia Sakhalin II T1
Qatar QatarGas II T1 & 2
Indonesia Tangguh T1
Russia Sakhalin II T2
Yemen Yemen LNG T1
Indonesia Tangguh T2
Qatar Ras Gas T6
Yemen Yemen LNGT2
Start Date
Mar-09
Apr-09
Jun-09
Jul-09
Jul-09
Aug-09
Nov-09
Dec-09
Capacity (bcm)
6.6
21.5
5.2
6.6
4.5
5.2
10.7
4.6
RWE Supply & Trading
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… whereas the global LNG-Market is currently turning due to
reductions in LNG demand in Asia
2007/2008
LNG boom in Asia
2009
LNG recession in Asia?
Strong Asia demand draws record
LNG imports in '07
TEPCO Jan fuel use falls; nuke rate
up, demand down
Fri Jan 25, 2008
NEW YORK, Jan 25 (Reuters) - Strong Asian demand
for liquefied natural gas, primarily from Japan, China
and India, drove LNG imports in the region to
record high levels last year, according to a Houstonbased consulting firm.
“Asian LNG imports overall increased by a whopping
480 bcf (billion cubic feet, or 10 million tonnes), a
record-setting import year. There was growth
across the board for all importing countries in
Asia," Waterborne Energy, which monitors the global
flow of liquefied gases, said in a report this week.
For all of 2007, total Asian LNG imports hit a
record 112.742 million tonnes, up 10 percent from
2006, according to Waterborne Energy data.
Fri Feb 13, 2009
TOKYO, Feb 13 (Reuters) - Thermal power consumption
at Japan's Tokyo Electric Power Co (TEPCO) fell in
January from a year earlier, as a higher monthly nuclear
run rate and weakening energy demand dented fossil
fuel use.
The use of fuel oil, crude oil, liquefied natural gas
(LNG) and coal all dropped below the previous
year's level, the company said in a statement on
Friday, falling for the fourth straight month.
Japan Jan industrial output falls 10
pct mth/mth
Fri Feb 27, 2009
Japan's industrial output fell 10.0 percent in January
from the previous month, government data showed on
Friday, posting the biggest drop on record and in line
with a median market forecast.
RWE Supply & Trading
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How does RWE see the LNG-Market?
> The LNG growth story continues
> In 2008, traditional Atlantic Basin LNG supplies moved to Asia due to numerous
factors which then combined reduced the availability of spot LNG cargoes in the
Atlantic Basin.
> IN 2009 Asian demand had dropped and the market will return LNG flow back top
the Atlantic Basin
> Substantial Change in Global Gas Market
– Isolated markets are becoming more integrated
– As more supply emerges arbitrage opportunities would cause a price convergence
and the price differential between major demand regions will be unsustainable
RWE Supply & Trading
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RWE´s believe: (Offshore) Flexibility is “the name of the game”
in tomorrows volatile, global converged LNG business
> The LNG business will experience an uneven development across the value chain
> Regasification presents companies with a strategic dilemma
> Therefore, RWE is developing a flexible LNG solution offered by:
> Seeking investment opportunities in LNG
RWE Supply & Trading
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Bahia Blanca GasPort, Argentina
> Dockside LNG regasification
– Utilizes ship-to-ship LNG transfer
with continuous natural gas send
out
– Capable of 400 mmcfd throughput
(closed-loop mode)
– Provides seasonal service during
Argentina’s winter
Dockside ship-to-ship LNG transfer
> Short development time and low cost
Gas offloading arm
– Final investment decision to inservice in less than 6 months
– Fixed facilities cost <5% of a landbased LNG terminal
> Project partners are YPF and RepsolGas Natural
> May 2009 will mark the start of the
GasPorts second year of service
Excelsior docked at the Bahía Blanca GasPort
RWE Supply & Trading
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