towards an efficient lng market in the asia - pacific
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Towards an efficient LNG market in the Asia - Pacific. Maria van der Hoeven Executive Director 10 September, 2013. For gas the Asian century is just starting. Primary energy consumption. Mtoe. Natural gas is the key to improving air quality in Asia. Osaka 1965. Osaka 2013. - PowerPoint PPT PresentationTRANSCRIPT
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© OECD/IEA 2013
Towards an efficient LNG market in the Asia - PacificMaria van der HoevenExecutive Director10 September, 2013
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© OECD/IEA 2013
For gas the Asian century is just starting
Asia Europe and USA-
500
1 000
1 500
2 000
2 500
3 000
coal gas
WEO 2012
Primary energy consumptionMtoe
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Natural gas is the key to improving air quality in Asia
Osaka 1965 Osaka 2013
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Economic growth and energy policies will raise the importance of Asia in global gas
2 010 2 015 2 020 2 025 2 030 2 035 0%
5%
10%
15%
20%
25%
30%
Due to geology and geography, LNG will have to play a dominant role in supplying Asia
Share of the Asia-Pacific in global gas demand
WEO 2012
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The old business model is an increasing competitiveness burden
0
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12
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1991 1994 1997 2000 2003 2006 2009 2012
$201
2/M
Btu
US (Henry Hub)
Europe (German import)
Japan (LNG import)
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Security issues, depletion and domestic demand growth lead to tight LNG supply
LNG liquefaction plantssecurity issuesdeclining gas outputsurging domestic demand
Supply shortfalls double the market impact of Japanese demand increase
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New LNG supply is predominantly backed by long-term contracts
Portfolio LNG and secondary re-exports both play an increasing role
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2013 2014 2015 2016 2017 2018Portfolio LNG The rest of the world Other AsiaChina Japan Capacity
bcm
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Are oil and gas still substitute products?
2 010 2 015 2 020 2 025 2 030 2 035 -
500
1 000
1 500
2 000
2 500
3 000
oil gas
Oil and gas fired power generation in the Asia PacificTwh
WEO 2012
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Is a destination clause still essential for project financing?
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With non-conventional technology and new discoveries, resources will compete for markets
WEO 2007 WEO 20120%
5%
10%
15%
20%
25%
30%
35%
40%
45%
The proportion of proven reserves projected to be consumed till 2030
In 5 years discoveries and reserve additions exceeded production by 175 years worth of Japanese demand
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The United States continues to lead non-conventional development
Technological improvements in seismic, drilling and fracking
“Mass manufacturing” methods in oil field services
Strong financial boost from liquids
With US markets saturated, Canadian production growth depends on LNG exports
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North America is emerging as a major exporter
Can Henry Hub+ emerge as a price signal for Asia?
Projects with DOE approval or signed export contracts
LNG from other countries0
10
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DOE Ap-proved
Freeport
Cove Point
Oman
Yemen
Egypt
Russia
Algeria
Contract signed
BCM
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Russian gas: the East is the manifest destiny?
• Production constrained by EU and domestic demand• Surging independent production backed by NGLs• Asian exports depend on capital-intensive
infrastructure
Source: Gazprom. Note that political boundaries are not endorsed by the IEA
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Facilitating market development
3rd party access and unbundling in gas AND electricity
Wholesale price liberalization
Flexible infrastructure Encouraging entry of new
supply Diversifying the primary
energy mix (nuclear, renewables)
Investment security and producer confidence needs to be maintained
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© OECD/IEA 2013
Towards an efficient LNG market in the Asia - PacificMaria van der HoevenExecutive Director10 September, 2013