Transcript Document

7th Doha Natural Gas Conference
and Exhibition
Doha, March 9th-12th 2009
What Will Be the Impact of Qatar’s Six
Mega-Trains on the Global LNG Market?
Andy Flower
Independent Consultant
LNG
LNG in 2008
• Global LNG trade fell marginally in 2008, the
first fall since 1980 & 1981
• The problem was on the supply side with only
5 of the 15 exporting countries increasing
their exports
• The reasons for the lower than expected
outcome include
– Shortage of Gas Supply: e.g. Nigeria, Indonesia,
Oman, Egypt
– Force Majeure: e.g. Nigeria, Algeria
– Technical Problems: e.g. Norway, Australia NWS
Train 5
– Delays in Start-up: e.g. Qatargas II Train 1,
Indonesia (Tangguh), Sakhalin
LNG
LNG Trade by Exporter 1964 – 2008
200
Norway
Equatorial Guniea
Egypt
Oman
Nigeria
Trinidad
Qatar
Australia
Malaysia
Abu Dhabi
Indonesia
Brunei
Libya
USA - Alaska
Algeria
in mtpa
160
120
80
7.4%pa
40
0
1964
1968
LNG
1972
1976
1980
1984
1988
1992
1996
2000
2004
2008
Outlook for LNG Supply 2009 to 2012
• 95.3mtpa of new production capacity now under
construction scheduled to come on stream between 2009
and 2012
Qatar
46.8mtpa
Indonesia
7.6mtpa
Russia
9.6mtpa
Yemen
6.7mtpa
Malaysia
1.5mtpa
Peru
4.4mtpa
Australia
4.3mtpa
Angola
5.2mtpa
Algeria
9.2mtpa
LNG
Global LNG Supply from Plants in Operation and
Under Construction in January 2009
300
200
100
LNG
Pacific Basin
Middle East
20
12
20
11
20
10
20
09
20
08
0
20
07
in mtpa
In mtpa
11.9%pa
Atlantic Basin
Firm and Flexible Markets for LNG
• Firm
– Markets which have to have the LNG supply and
will pay the price needed to secure cargoes
– Asia, southern Europe (Turkey, Spain, southern
France, Portugal), Latin America, Caribbean, New
England (USA)
• Flexible
– Markets with alternative pipeline gas supplies
where price will determine whether LNG is
imported
– USA (Gulf of Mexico, West Coast), UK, Belgium,
Netherlands
LNG
LNG Demand Outlook 2009-2012
• The increase in supply comes at a time
when demand is weakening in most of
the firm LNG markets
– Asian imports in 4Q08 down 5% compared
with 4Q07 (and lower than 3Q08)
– Imports in firm European markets up by
14% in 1H08 (compared with 1H07),
unchanged between 2H07 and 2H08
– Main increase in imports into firm markets
in the 2H08 has been in the new markets
in the Americas (Argentina and Mexico)
LNG
Short-term Cargoes from the Atlantic Basin
Received by Asian Buyers in 2007 to 1Q2009
5
3
2
1
)
China
(e
India
1Q
09
Taiwan
4Q
08
3Q
08
4Q
07
Japan
2Q
08
Korea
1Q
08
LNG
3Q
07
2Q
07
0
1Q
07
In mt
4
Total Asia
LNG Demand in Firm Markets and Global Supply
2007-2012
300
200
100
Europe
Americas
20
12
20
11
Asia
20
10
LNG
20
09
20
08
0
20
07
in mtpa
In mtpa
Available for
Flexible Markets
Supply
Ja
n0
M 8
ar
-0
M 8
ay
-0
Ju 8
l-0
Se 8
pNo 08
v0
Ja 8
n0
M 9
ar
M 09
ay
-0
Ju 9
l-0
Se 9
p0
No 9
v0
Ja 9
n1
M 0
ar
M 10
ay
-1
Ju 0
l-1
Se 0
pNo 10
v10
In $/MMBtu
Natural Gas, LNG and Crude Oil Prices
Jan 2008 to Dec 2010
25
Actual
LNG
US (Henry Hub)
Outlook at $50/Bbl
20
15
10
5
0
Spain
Japan
Brent
UK-NBP
The Importance of Qatar – Incremental
Liquefaction Capacity 2008-2012
100
in mtpa
80
60
40
20
0
2009
2010
Qatar
LNG
2011
Rest of the World
2012
Which Countries Will be the Drivers of
Supply Growth from 2013
• It takes at least 48 months to construct a new
onshore liquefaction plant
• Projects which have not yet taken a Final
Investment Decision (FID) can not start-up
before 2013
• Over 270mtpa of new capacity at the
planning stage to add to the close to 300mtpa
in operation or under construction
• Over 70% of the planned capacity is in four
countries: Australia, Nigeria, Iran and Russia
LNG
Impact of “Credit Crisis”
• Industry in “wait and see” mode
• Reductions in commodity prices have not yet
fed through to liquefaction plant costs
• Availability of credit not yet tested
• General view is that credit will be available for
“good” projects but financiers will be more
risk averse
– Proven rather than new technology
– Financially strong partners
– Creditworthy buyers
• Potential for FIDs to be delayed in the hope
that the outlook will become less uncertain
LNG
Global LNG Supply 2007 to 2020
500
300
200
100
0
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
10
in mtpa
400
Average Annual Growth
1980-2008 7.4%
2008-2012 11.9%
2012-2020 5.0%
In Operation in Jan 2009
LNG
Under Construction in Jan 2009
Planned
Possible Global LNG Supply and Demand
2007 to 2020
600
Possible Shortfall
120mtpa in 2020
400
300
200
100
In Operation in Jan 2009
Planned
LNG
20
20
20
19
20
18
20
17
20
16
20
15
20
14
20
13
20
12
20
11
20
10
20
09
20
08
0
20
07
in mtpa
500
Under Construction in Jan 2009
Forecast Demand
LNG
LNG