cnooc natural gas business - united states energy ... cnooc zhang... · steady development of cnooc...

CNOOC

2 October 2014

CNOOC Natural Gas Business

1. CNOOC Gas & Power Overview

2. Chinese Gas Market Overview

4. Chinese Gas Market Outlook

3. Chinese Economic & Gas Market Update

5. Summary

3

SIX BUSINESS SECTORS

Exploration & Production

Oil Field Service Gas & Power

Refining &Chemical Fertilizer

Renewable Energy Finance

CNOOC Overview• Founded in year 1982 • China's largest offshore oil and gas producer• Ranked 79 in 2014 Fortune Global 500 (first listed in 2007)• Ranked Class A in 9 consecutive years in SASAC state-

owned enterprises performance appraisal

4

Capital-intensive & technology-intensive complete industrial chain

CNOOC Gas Industrial Value Chain

LNG Transport

Oversea gas production &liquefaction

International Market

Offshore gas

Natural Gas Pipeline

LNG receiving terminal

LNG storage center

CBM

vehicle filling

Distributed energy Truck

power generation

CNG

Industrial users

local distributor

Town gas

vessel filling



LNG Transport

LNG receiving terminal

5

Steady Development of CNOOC Natural Gas Business

SNG、CBM、Shale Gas

Offshore Gas

Natural GasNatural GasLNG

• From year 2006 to 2013,respectivelyimported LNG 0.745, 2.98, 3.21, 5.80,

9.34, 10.85,10.79,13.01 million tons In year 2013, offshore gas production was 10.7 bcm.

6

Domestic Onshore

Gas

Offshore gasImported

LNG

Resource Pool & Market Group

Power Generation Town Gas Filling Industrial/Chemical

CBMCBM SNGSNG

LNG produced by small

liquefaction plant

LNG produced by small

liquefaction plant

Resource

Offshore gasOffshore gas

7

Domestic Resource

8

CNOOC gas & power group has established intensive cooperation relationship withmore than 64 major global LNG market participants and contracted long term LNGresource by now is up to 25.7 million tons/year.

AmericaChevron & other 8

companies

AfricaNNPC & other 3

companies

EuropeTotal & other 21

companies

Middle East & IndianQG & other 8 companies

Northeast AsianTEPCO & other 17

companies

Southeast Asian &

p

Southeast Asian & Australia

Petronas & other 7companies

International Resource

Guizhou

Guangxi

ChongqingSichuan

Qinghai

GansuInner Mongolia

Anhui

Yunnan

湖北

ShanxiNingxia

Xinjiang

Shanxi

Henan

Hunan

Taiwan

Fujian

Jiangxi

Hainan

BeijingTianjin

Hebei

Shandong

Southern Region (Guangdong,Hongkong,

Macao,Hainan)

Southwestern Region(Sichuan,Chongqing,Yun

nan,Guizhou,Guangxi)

Southeastern Region (Jiangxi,Fujian,

Taiwan)

Eastern Region(Jiangsu,Zhejiang, Anhui,Shanghai)

Northern Region(Beijing,Tianjin,Hebei,

Shandong)

Northeast Region（Heilongjiang, Jilin,

Liaoning）

Central Region(Shanxi,Henan,Hubei，

Hunan)Shanghai

Zhejiang

Jiangsu

Heilongjiang

Jilin

Liaoning

Macao Hong Kong

Guangdong

CNOOC Major Market Areas

Hubei

Tibet

10

Infrastructure-LNG Receiving Terminals

Dapeng LNG Fujian LNG Shanghai LNG

Zhejiang LNG Tianjin FSRU Zhuhai LNG Hainan LNG

Jiangsu LNG Yuexi LNG Zhangzhou LNG

YuedongLNG

Shenzhen LNG

11

Infrastructure- Pipeline and Others

Power PlantIn-operation: 6Total Installed Capacity:8480MW

PipelineCommissioned & Under Construction: 3698 km

Filling StationCommissioned: 171Under Construction: 70

To Japan

To Korea

To Taiwan

Zhejiang LNG Storage Center

Southern Electricity Center

Tianjin LNG Storage Center

Zhuhai LNG Storage Center

Hainan LNG Storage Center

Northern Electricity Center




3. Chinese Economic & Gas Marker Update

5. Summary

Chinese Energy Consumption

• In 2013, the primary energy consumption of China was 3.75 billion tons ofstandard coal, increased by 3.7% over last year. Gas consumption was about 169.2 bcm, increased by 13% over last

year, accounting for 5.9% of the total primary energy consumption.

0

500

1000

1500

2000

2500

3000

3500

400019

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

1020

1120

1220

13

Non-fossil Energy

Nature Gas

Oil

CoalMilli

on T

ons

of S

tand

ard

Coa

l

Chinese Natural Gas Consumption

29.233.9

39.746.8

56.1

70.5

81.389.5

107.6

131.3

147.1

169.2

0

20

40

60

80

100

120

140

160

180

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

bcm

• Chinese natural gas consumption average annual growth was 17.3%between 2002 to 2013.

• In year 2013, Chinese nature gas consumption is 169.2 billion cm with 30%dependence on imported nature gas.

Chinese Natural Gas Consumption Structure

Characteristics of Chinese natural gas market

• Seasonal fluctuation of demand

• Requiring ensured supply security

• Fierce competition

2013 Natural Gas Consumption Structure

Residential41%

Industrial 28%

Chemical 13%

Power Generation

18%

上海

Domestic Gas 63%

Imported Pipeline gas 19%

Imported LNG 18%

Estimated proportion of each gas source in year 2020

Domestic Gas 70%

Imported pipeline gas 16%

Imported LNG 14%

Proportion of each gas source in year 2013

Gas Sources

徐州

商丘

营口

哈尔滨

沈阳

天津

日照安阳

鄂州

鄂尔多斯

端氏CBM

博爱

郑州

潍坊

盐城

海口

厦门

福州温州

深圳广州

珠海

CNPC PipelineSinopec PipelineCNOOC Pipeline

Gas from Central Asia：85bcm/y

Gas from Russia：68bcm/y

Gas from Myanmar ：12bcm/y

Sichuan Basin

Domestic Onshore Gas

Ordos Basin

TarimBasin

Chinese LNG Import

• China imported 18.08 million tons of LNG in 2013, while 72% of which was imported by CNOOC

0

5

10

15

20

25

2006 2007 2008 2009 2010 2011 2012 2013 2014 20150.75 3.17 3.36 5.79

9.48 10.85 10.79 13.01

1.366 3.855.07

Imported by CNOOC Imported by Others

Million Tons

Policy-Pricing &Taxation

Domestic Price is regulated by the government• The Town-gate price ceilings of domestic and imported pipeline gas are

regulated by the government• Although LNG price is not regulated, the price still be affected by the town

gate price.

LNG import VAT is proportionally refunded





5. Summary

14.6%

1.0%

-3.1%

5.1%

9.2%

-0.3%

5.6%

12.7%

4.3%

10.6%

-18.1%

-6.6%

0.9%

7.0%7.2%

14.5%

-20%

-10%

0%

10%

20%

Export Growth Rate

8.4%8.3%

9.1%

10.0%10.1%

11.3%

12.7%

14.2%

9.6%9.2%

10.4%

9.2%

7.8%7.7%

7.4%7%8%9%10%11%12%13%14%15%

GDP Growth Rate

14.1% 14.4%

5.6%

7.2%

13.2%12.1%

5.9%

7.5%

5.3%

0%

4%

8%

12%

16%

2006 2008 2010 2012 2014Jan-June

Electricity Consumption Growth Rate • Economic growth slowed down, representing a GDP growth of 7.4% in the first half year

• Export situation is still not optimistic, representing a decrease of 1.2% in the first half year

• Electricity demand is not strong, representing a slight growth of 5.3% in the first half year

• Severe environmental pollution problems come along with the economic development

China’s Recent Economic Situation

Natural Gas Price Reform Main Point

• Since September 1, 2014, for existing gas for non-residential use, the city-gate price ceiling increases Rmb 0.4 /m³

• In 2015, the goal is to achieve that the price of existing gas equals that of incremental gas

Impact on the Market • Lead more rational consumption of the gas and promote the industry

upgrading .• The demand growth slows down.

However, the prices of natural gas and electricity generated by gas do not fully reflect their peak-shaving and environmental value.

China’s Recent Gas Market

Gas Market Situation• January-June 2014, gas consumption is 88.7 bcm, increased by 8.9%,

less than 13% in last year.

• Competition in the domestic gas market is driven by： Steady progress in domestic onshore natural gas exploration and development Rapid progress in offshore gas exploration More pipeline gas import

Mid-Asia Myanmar

Coastal LNG terminals move into operation Unconventional gas made breakthroughs

• Due to user’s lower affordability of gas price, some “coal to gas” users changed back to coal

0%

5%

10%

15%

20%

25%

30%

Chinese Nature Gas Consumption Growth Rate





5. Sumarry

Outlook of Chinese Gas Demand

• Expected by 2015, China’s nature gas demand will reach 230 bcm,accounting for 7.5% of the total primary energy. By 2020, consumptionwill increase to 360-430 bcm , accounting for 10-12% of the total primaryenergy.

0

500

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

bcm

430

360

Outlook of Chinese Gas Demand

Gas by Usage in year 2020

Chemical 9%

Power Plant27% Residential

&Commercial38%

Industrial 26%

Gas by Source in year 2020

Imported pipeline gas

19%

Domesticonshore gas

57%

DomesticOffshore gas

6%

Imported LNG18%




3. Chinese Economic & Gas Update

5. Summary

Summary• In short term, the growth of gas demand in China is slowing down.

• In long term, there is broad space for the further development of Chinesegas market.

• As the demand cannot be satisfied by domestic resources, gas import isimperative for Chinese gas market.

• The competition among diversified gas sources is becoming fierce,mainly in price and security of supply.

• Though LNG is an important part of imported gas, it should keepcompetitive in price and supply flexibility.

Summary

All along, CNOOC maintains a leading position inChinese LNG market. We are willing to establish long-termand stable cooperative relationships with worldwide LNGparticipants. We would like to develop diversified cooperationto achieve win-win situation in terms of upstream explorationand development, resource purchase and sales, liquefactionfacilities etc.

Thank You

cnooc natural gas business - united states energy ... cnooc zhang... · steady development of cnooc...

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