evolution of the asian lng industry. exxonmobil gas & power marketing 30 years experience with...
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![Page 1: Evolution of the Asian LNG Industry. ExxonMobil Gas & Power Marketing 30 years experience With our partners: »Supply about 20% of world’s LNG today »Arun](https://reader035.vdocuments.net/reader035/viewer/2022062322/56649e755503460f94b76303/html5/thumbnails/1.jpg)
Evolution of the Asian LNG Industry
![Page 2: Evolution of the Asian LNG Industry. ExxonMobil Gas & Power Marketing 30 years experience With our partners: »Supply about 20% of world’s LNG today »Arun](https://reader035.vdocuments.net/reader035/viewer/2022062322/56649e755503460f94b76303/html5/thumbnails/2.jpg)
ExxonMobil Gas & Power Marketing
• 30 years experience• With our partners:
» Supply about 20% of world’s LNG today» Arun 6.2 MTA, Qatar 14.3 MTA
• Qatar primary growth vehicle• Financial Strength; Excellence in
Technology; Mega-Project Skills
• 30 years experience• With our partners:
» Supply about 20% of world’s LNG today» Arun 6.2 MTA, Qatar 14.3 MTA
• Qatar primary growth vehicle• Financial Strength; Excellence in
Technology; Mega-Project Skills
Active development Producing or under construction
North America
Europe
QatarQatarAsia
Arun
Gorgon
Nigeria
Angola
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LNG Value Chain
• All links of the chain are capital intensive businesses
• Chain is defined by interdependence of projects (shared risks), held together by the commercial structure
~ $0.5-1.0bn ~ $3 bn~$0.1s bn~ $0.5bn~ $2 bn
LNG
ReceivingTerminal
Buying & Receiving
GasLNG
GasDistribution
Distribution
Shipping
Shipping
GasField
Development
Gas
Liquefaction
Upstream Projects
PowerGeneration
TownGas
End-Users
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Characteristics of Asian LNG Industry
• Japan, Korea and Taiwan are historic major LNG importers
• Durable long-term contracts secured competitive supply and supported investments and commitments
• High credit-rating buyers / sellers; financing available
• Importers control own infrastructure
• Sales predominantly on CIF basis
![Page 5: Evolution of the Asian LNG Industry. ExxonMobil Gas & Power Marketing 30 years experience With our partners: »Supply about 20% of world’s LNG today »Arun](https://reader035.vdocuments.net/reader035/viewer/2022062322/56649e755503460f94b76303/html5/thumbnails/5.jpg)
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LNG Business in Transition
• Worldwide growing LNG demand
• Increasingly remote and technically challenging supply sources; increased scale
• Financial strength important throughout value chain
• Long-term contracts remain crucial to underpin upstream investments
![Page 6: Evolution of the Asian LNG Industry. ExxonMobil Gas & Power Marketing 30 years experience With our partners: »Supply about 20% of world’s LNG today »Arun](https://reader035.vdocuments.net/reader035/viewer/2022062322/56649e755503460f94b76303/html5/thumbnails/6.jpg)
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LNG Demand
0
50
100
150
200
250
1990 1995 2001 2005 2010 2015
Japan, Korea, Taiwan
China, India
Rest of World
MT
Source: PFC Energy
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Changes in LNG Market
• Deregulation, interfuel competition, and economic growth in core markets impacting:
» Volume flexibility
» Contract term
• Spot/short-term sales increasing
• FOB sales becoming more common
• ‘Liquid’ market access in U.K. and U.S.
![Page 8: Evolution of the Asian LNG Industry. ExxonMobil Gas & Power Marketing 30 years experience With our partners: »Supply about 20% of world’s LNG today »Arun](https://reader035.vdocuments.net/reader035/viewer/2022062322/56649e755503460f94b76303/html5/thumbnails/8.jpg)
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Regulation and Deregulation
• Legislative/regulatory principles important to investors:
» Stability of legal and fiscal frameworks
» Equitable laws, regulations and dispute resolution
» No artificial infrastructure obstacles
» No import restrictions
» Sanctity of contracts
» Freedom of commercial arrangements and structures
» Market-based, non-subsidized commodity pricing
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Changes in LNG Technology
• Increased capital intensity developers need:» Large project development capability» Financial strength and capital market access» Long-term investment certainty
Liquefaction
Shipping / Receiving
FieldDevelopment Production technology advances
Increasing train size
Larger ships andterminals
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New LNG ImportTerminal Developmentsand Proposals
2001 LNG Demand
2010 LNG Demand
Global Integration of LNG Markets
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Requirements for Continued Growth
• Economic growth
• Balanced transition to liberalized market environment
» Preserve ‘success factors’
» Consultation through Value Chain
• Stable framework to foster commercial freedom
» International competitive fiscal regimes
» Proper regulatory environment
» Free market based pricing and contract terms
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Summary
• Significant LNG demand growth can be met by development of competitive supplies
• Long-term investment certainty and risk reflective returns are required
• Preserve ‘success factors’ and carefully implement change
• Regulatory environment and successful track record are important