01 01 anthony barker bg singapore presentation

8/18/2019 01 01 Anthony Barker BG Singapore Presentation

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By: ,

By: ,

17th INTERNATIONAL CONFERENCE & EXHIBITION

ON LIQUEFIED NATURAL GAS (LNG 17)

Singapore:

Emergence of a new LNG market

By: Dr. Anthony Barker, BG Group

16 April 2013

17

th

INTERNATIONAL CONFERENCE EXHIBITION ON

LIQUEFIED NATURAL GAS (LNG 17)


2/20

Legal notice

The following presentation contains forward-looking statements concerning BG Group plc’sstrategy, operations, financial performance or condition, outlook, growth opportunities orcircumstances in the countries, sectors or markets in which BG Group plc operates. By theirnature, forward-looking statements involve uncertainty because they depend on futurecircumstances, and relate to events, not all of which can be controlled or predicted. Althoughthe Company believes that the expectations reflected in such forward-looking statements arereasonable, no assurance can be given that such expectations will prove to have been

correct. Actual results could differ materially from the guidance given in this presentation for anumber of reasons. For a detailed analysis of the factors that may affect our business,financial performance or results of operations, we urge you to look at the “Principal risks anduncertainties” included in the BG Group plc Annual Report & Accounts 2011. Nothing in thispresentation should be construed as a profit forecast and no part of this presentationconstitutes, or shall be taken to constitute, an invitation or inducement to invest in BG Groupplc or any other entity, and must not be relied upon in any way in connection with anyinvestment decision. BG Group plc undertakes no obligation to update any forward-lookingstatements.

No representation or warranty, express or implied, is or will be made in relation to theaccuracy or completeness of the information in this presentation and no responsibility orliability is or will be accepted by BG Group plc or any of its respective subsidiaries, affiliatesand associated companies (or by any of their respective officers, employees or agents) inrelation to it.


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Singapore’s challenges

Source: Wood Mackenzie, November 2012 & EMA Singapore Energy Statistics Report 2012

75.7%

20.3%

4.0%

2011 gas demand

Power

Industry

Other

84.1%

15.9%

2011 gas supply

Indonesia

Malaysia

78.0%

18.4%

3.6%

2011 fuel mix forelectricity generation

Natural Gas

Petroleum Products

Others

Power

Industry

Other

Indonesia

Malaysia

Natural gas

Petroleum products

Others


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Consolidating demand

• Marketing multiple gas sales

contracts

• Inventory management and

24/7 commercial operations• Market development

Sources: BG Group estimates 2012,Schlumberger Business Consulting, 2009

Singapore LNG demand

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2013 2014 2015 2016

m t p a


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Meeting Singapore’s challenges

Source: BG Group, 2012

Aggregator

(BG Group)

Terminal owner

(Singapore LNG)

Energy Market

Authority of

Singapore

Gas buyersLNG supplier

(BG Group)


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BG Group’s LNG marketing

Henry Hub

m t p a

Singapore

Source: BG Group Strategy Presentation, February 2012


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Global assets, supply and markets

* Exclusive right to supplyPotential liquefaction

Existing long term supply source Liquefaction under construction

Equity position

Existing import capacity

Long term customer

UK

USA

Nigeria

EgyptTrinidad

& Tobago

EG

Chile

Singapore*

AustraliaTanzania

Canada

China

Japan

Brazil

India


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• Pipeline gas moratorium

• Vesting contracts

• SLNG step-in and

underwriting

Policy and regulatory support

EMA initiatives and policies

0

5001,0001,5002,0002,5003,000

3,5004,000

Q 2 2 0 1 2

Q 3 2 0 1 2

Q 4 2 0 1 2

Q 1 2 0 1 3

Q 2 2 0 1 3

Q 3 2 0 1 3

Q 4 2 0 1 3

Q 1 2 0 1 4

Q 2 2 0 1 4

Q 3 2 0 1 4

M W

Incremental gas generationcapacity

Source: Tri-Zen Consulting, BG Group estimates, May 2012


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Long-term sales

• 3 mtpa exclusive franchise

to supply Singapore

• Approx 2.6 mtpa

contracted with 10 – 20year supply periods

• 10 gas buyers and ~15

GSAs

Long-term sales projection

Source: BG Group, November 2012

1.61.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

Q 1 2 0 1 0

Q 4 2 0 1 0

Q 3 2 0 1 1

Q 2 2 0 1 2

Q 1 2 0 1 3

Q 4 2 0 1 3

Q 3 2 0 1 4

Q 2 2 0 1 5

m t p a


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Singapore franchise state of play

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2 0 1 7

2 0 1 8

2 0 1 9

2 0 2 0

2 0 2 1

2 0 2 2

2 0 2 3

2 0 2 4

2 0 2 5

2 0 2 6

2 0 2 7

2 0 2 8

2 0 2 9

2 0 3 0

2 0 3 1

2 0 3 2

2 0 3 3

Remaining Sales (3mtpa Franchise Forecast)Contracted Long-term Sales

m t p a


Contracted long-term sales

Remaining sales (3 mtpa franchise forecast)


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Long-term sales

• BG Group has contracted at

three long-term price tranches

• Singapore’s power market

is now well supplied withlong-term volumes

• Buying interest seen from

2018 onwards

– Replacement of expiring pipelinegas import contracts

– Demand growth driven byindustry

0.0

2.0

4.06.0

8.0

10.0

12.0

2 0 1

3

2 0 1

5

2 0 1

7

2 0 1

9

2 0 2

1

2 0 2

3

2 0 2

5

m t p a

Incremental demand

Sumatra pipeline gas replacement

Natuna pipeline gas replacement

Malaysia pipeline gas replacement

BG Group franchise


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Short-term supply security

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

2013 2014 2015

m t p a

Source: BG Group, December 2012

Available volumes for short-term sales

BG Group committed volumes

Potential for short-term sales


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Short-term sales

79%

21%

2013 volumes• Through 2012, BG Group worked

closely with the regulator (EMA) to

develop:

– Standardised master short-term GSAs

– ‘Stand alone’ short-term GSAs

• Short-term interest driven by:

– Ramp up and commissioningrequirements

– Operational concerns

– Commercial opportunities to accessspot LNG

– Pipeline gas displacement

– Power market opportunities

Long-term sales

Short-term sales


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0

0.020.04

0.06

0.08

0.1

0.120.14

0.16

0.18

0.2

GSA1 GSA2 GSA3 GSA4 GSA5 Cargoes

m t

Consolidating demand

Aggregator's short-term and spot GSAs

1 c a r g

o

2 c a r g o e s

3 c

a r g o e s


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Market development


Singapore

LNG

inventory

Term

LNGFuel oil &

oil products

Indonesia

piped gas

Malaysia

piped gas

Spot LNG

Electricity

procurement

100

150

200

250

300

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 0 5 = 1 0 0

Relative pricing of

fuel oil & Brent

BrentFuel oil


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Singapore market overview

-

2

4

68

10

12

14

16

2 0 1

0

2 0 1

1

2 0 1

2

2 0 1

3

2 0 1

4

2 0 1

5

2 0 1

6

2 0 1

7

2 0 1

8

2 0 1

9

2 0 2

0

2 0 2

1

2 0 2

2

2 0 2

3

2 0 2

4

2 0 2

5

m t p a

Sources: BG Group estimates, November 2012 & EMA procurement framework consultation paper, March 2012

Aggregator franchise – long-term contracted supply

Long-term supply opportunities (EMA consultation paper)

Aggregator franchise – 3 mtpa

Short-term supply opportunities

Gas demand (EMA consultation paper)Terminal max throughput – facilities under construction


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Pipeline gas displacement

• LNG is competitive against

pipeline gas in Singapore

• Spot LNG prices regularly

support short-termdisplacement of pipeline gas

with LNG

Pipeline gas prices

S p o t L N G

p r

i c e s

Pipeline gas

displacement


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Market development LNG reloads

• Physical reload capability

enables break bulk

trans-shipment

• Demand side interest in LNGreloads for various regional

markets

• Early stage assessment of

LNG bunkering under way

SLNG full development

Source: EMA.gov.sg


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Conclusions

• Close cooperation among

BG Group, SLNG and EMA

• Aggregator model tailor made

to meet Singapore’s gasmarket challenges. It could be

adapted to introduce LNG to

new markets

• BG Group is committed toongoing development of

Singapore gas market


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01 01 anthony barker bg singapore presentation

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