Transcript SAMPLE HOLDINGS CAPITAL STRUCTURE

LNG in Australia
and the emerging roll of CSM
The Australian petroleum industry is dominated by gas
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Location and relative size of Australian petroleum reserves
Gippslan d
Cooper
Gippsland
CSM Potential
CSM current 2P
reserves
Legend
Oil
Gas
Condensate
What is LNG?
Liquefied Natural Gas (LNG) is not in itself a product but rather a transport system for
natural gas.
By cooling natural gas to minus 163 degrees Celsius it is turned into a liquid that takes
only 1/600th the volume that can be transported in specially designed ships.
At the destination the LNG is heated and turned back into natural gas and used for
electricity generation or domestic gas supply.
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LNG MARKET - Demand
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>Source: Gas Strategies
The GFC in 2008 lead to the first year on year reduction in LNG demand in history.
The large number of proposed projects suggest that LNG market may be entering a period of
potential over supply.
• LNG supply is a long term relationship and buyer and sellers need to see through current market
conditions to secure long term supplies.
• LNG demand growth is forecast to resume it long term growth trajectory with the re-emergence
of global economic growth.
LNG MARKET - Supply
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Projects face stiff competition from other LNG projects in the region & globally
 There is only a finite amount of capital available & the majors will not want to flood the market to
create an imbalance.
LNG MARKET – Potential LNG projects in Australian
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LNG MARKET – Potential LNG projects in Australian
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Plant
Capacity
mtpa
Estimated
Capital Cost
A$ Billion
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$27 ~$50b
today
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2
Operating
1989
Operating
2005
Under Construction
Pluto Train 1
Gorgon
4.3
15
12
48
2010
2013
Woodside, Tokyo Gas, Kansai Electric
Chevron, ExxonMobil, Shell
Possible projects
NWS
PNG LNG
Pluto Train 2
Wheatstone
NWS Train 6
Browse
Scarborough LNG
6.3
5
5
4
15
8
18
12
12
8
50
15
2014
2014
2014
2015
2015
2015
ExxonMobil, Oil Search Santos, others
Woodside
Chevron
Woodside, BP, Shell, BHPB, Chevron, MIMI
Woodside, BP, Shell, BHPB, Chevron
ExxonMobil, BHPB
Darwin/Timor Sea LNG
Ichthys
Timor Sea LNG
GDF Suez Floating LNG
15
4
4
30
8
12
2014
2014
2016
InpexTotal
MEO
GDF Suez, Santos
3.5
14
7
8
35
12
1.5
0.5
2014
2014
2014
2014
2012
Santos, Petronas
Origin, ConocoPhillips
QGC, BG
Arrow Energy, Shell
LNG limited, Golar LNG, Arrow Energy
130.6
280.5
Proposed
Start Date
Existing Projects
NWS Project Trains 1 -5
Darwin LNG
Gladstone LNG (Coal Seam
Methane based)
GLNG
APLNG
Curtis LNG
Fisherman's Landing
Gladstone LNG
Total Proposed Projects
Woodside, BP, Shell, BHPB, Chevron, MIMI
ConocoPhillips, INPEX, ENI, Santos
Proposed Qld LNG Projects
Project / Sponsors
Queensland Curtis LNG
Size
1st LNG
Status / Detail
$12B
7.4Mt/p.a
2014
In FEED; EIS released; Final Investment
Decision expected in 2010.
2014
In FEED; EIS released; Final Investment
Decision expected Q2 2010.
2012
In FEED; Site works commenced; will use
Korea technology; CB&I appointed Project
Manager; BNP Paribas Financial Advisor.
(2 train)
GLNG (Santos / Petronas)
$7-8B
3.5Mt/p.a
(1 train –
initially)
Gladstone LNG (LNG Ltd, Golar
LNG, Arrow Energy)
Australia Pacific LNG
US$500M
1.5Mt/p.a.
(1 train –
initially)
$35B
14Mt/p.a.
(4 trains by
2020)
Shell Gladstone LNG
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Estimated Cost
?
Gas supply agreement in place with Arrow
for 1.5mt p.a.
2014 - 2020 Estimates Final Investment Decision to
be reached by end 2010.
Well behind the other projects. No FEED
commenced. Declared significant
project in June 2009
Specifics of the LNG cycle from Coal Seam Gas fields
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UPSTREAM
DOWNSTREAM
Gladstone LNG projects
Development potential and local impact
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•It is unlikely all the proposed project will proceed.
•However, it is realistic to anticipate the development of a ~28 mtpa LNG
industry in Gladstone over the next 10 years. This assumes the sanction of
a 3.5mtpa train each year from 2010 with first production commencing in
2014.
•The construction of a 28 mtpa LNG industry in Gladstone will have
significant economic benefits to Queensland and the Gladstone region in
particular.
•An economic study for the Queensland government Studies suggest that a
mid size 28 mtpa LNG industries located at Gladstone would:
Increase the Gross State Product by $3.056 billion (or 1 per cent) and
create over 18,000 jobs for Queensland.
Generate a royalty return of $850 million per annum to Queensland
Create 18,100 jobs, 10,300 jobs during its 10-year construction phase
at Gladstone and 7400 in regional Queensland associated with wells and
pipelines.
Appendices
Appendix: Gladstone LNG Projects
National Economic Impact
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The Queensland Premier Anna Bligh has said:
“This is a once in a lifetime opportunity. The LNG industry can do for Queensland
what coal did to the Bowen Basin and the rest of the state in the 1970s and
1980s, and beyond.”
“They could be part of a new industry with a potential worth of more than $40
billion to the Queensland economy.”
Appendix: LNG Market - LNG prices are recovering after the recession
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Source: Gas Strategies
Appendix: Price relationships trending to oil parity since 2005
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Recent price deals in long-term contracts with buyers in Asia have been within a relatively
narrow range, from 10% below crude oil parity to 5% above crude oil parity at an oil price of
$60/Bbl. Price review clauses have also been introduced into many recent contracts. They
typically call for a review after a fixed number of years but do not provide clear guidance on
what factors should be taken into account in the renegotiations.
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