China Energy Demand and

China LNG Fleet Development

Capt. Yan Weiping from China LNG Shipping (Holdings) Limited

April 24, 2008 Shanghai

First LNG Carrier Built in China• On April 3 2008, the first LNG carrier built in

China, “Dapeng Sun”, was delivered, and she has sailed to Australia for her maiden voyage;

• It took 42 years to import LNG and 44 years to build LNG carrier in China since the start of commercial LNG shipping in 1964 in the world

• Construction period of first Chinese LNG carrier is 40 months

• A significant step for China to secure energy supply, to upgrade shipbuilding industry and to develop LNG carrier fleet

Length Over All 291.50 mLength Between Perpendiculars 274.10 mBreadth 43.35 m Depth 26.25 mDraft 11.43 mCargo Tank Capacity 147,736 m3

Dead Weight 73668Gross Tonnage 97871Net Tonnage 29361Main Engine Power 27033 kWSpeed 19.5 Knots

Main Particulars of Dapeng Sun

loading port NWS Bay

unloading port Shenzhen Dapeng Bay

sailing distance 2771 NM

days per voyage 15 days

annual voyages 22 voyagescargo delivered

per voyage 65,000 tons

cargo delivered annually 1,420,000 tons

China Energy Demand• Growth rate of the world average oil

consumption is 1.82%• China has higher energy consumption growth

rate than the world average– 5 year average growth rate of primary energy

consumption: 11.17%– 5 year average growth rate of oil consumption: 9%– annual average increase in import crude oil:

19.23%• In 2007, China imported 163 million tons of

crude oil with a 12.39% increase

China Energy Consumptionprimary energy consumption（billion tons）

oil consumption （million tons）

net import of crude oil consumption（million tons）

natural gas consumption（billion m3）

2001 1.00 227.9 60.26 26.82002 1.00578 247.4 69.41 28.62003 1.2287 271.7 91.13 33.22004 1.4235 318.9 122.82 39.02005 1.5540 327.3 126.82 47.02006 1.6978 349.8 145.18 55.65 year average growth

11.17% 8.95% 19.23% 15.71%

2007 163.17 67.3

2007 growth rate

12.39% 21.04%

China Natural Gas Consumption and Estimation

• Increased demand for natural gas and other clean energy– 5 year average growth rate: 15.71%– natural gas consumption in 2007: 67.3 billion

m3 with 21% growth– natural gas consumption is less than 3% in

total primary energy consumed• Estimation in 2010: 100-120 billion m3

• Estimation in 2020: 100-120 billion m3

• Inevitable trend to import LNG

Planned LNG Projects in China• Started to plan LNG import project in 1998• Commissioning of Guangdong Dapeng LNG

receiving terminal in June 2006• More than ten LNG terminals projected

– first LNG cargo will arrive in Fujian terminal by the end of this month

– expected commissioning of Shanghai terminal in 2009– construction started with Zhejiang, Zhuhai, and Jiangsu

terminals• Total import volume: 33 million tons equivalent to

45 billion m3

• All planned LNG import projects only meet 30% of estimated consumption in 2015

China LNG SPAs• Effective LNG SPAs

– Guangdong Dapeng LNG:3.7 million tons LNG from North West Shelf of Australia annually

– CNOOC Fujian LNG:2.6 million tons LNG from Tangguh, Indonesia

– Shanghai LNG:3.0 million tons LNG from Malaysia• Signed LNG HOAs

– PetroChina:3.0 million tons LNG from Gorgon, Australia– PetroChina:3.0 million tons LNG from Qatar– CNOOC:2.0 million tons LNG from Qatar

• Total import volume is 17.3 million tons LNG equivalent to 24 billion m3 natural gas, representing 15% of natural gas consumption in 2015

China LNG Fleet Demand

• All projected LNG receiving terminals will start operation within ten years

• First phase of each terminal is 3 million tons• Middle East and Australia are main sources• Need 30 large and medium sized LNG ships• LNG carrier fleet will contribute 10% shipping

capacity growth to the world

China LNG Fleet Development Model• COSCO Group and China Merchants

Group jointly incorporated China LNG Shipping (Holdings) Limited (“CLNG”)

• CLNG and BP Shipping jointly incorporated China LNG Shipping (International) Company Limited (“CLSICO”) to operate and manage LNG carriers invested by CLNG

China LNG Fleet Development Model• To promote development of domestic shipbuilders

– cooperation with foreign experienced shipyards– participation of foreign experienced shipbuilding supervision

team• Multi-investors from home and abroad

– investor from LNG supplier– investor from LNG buyer

• Ship management– CLSICO (CLNG and BP Shipping)

• Seafarers training– on board of BP shipping fleet for familiarization and practice– shore training for key systems and equipments– facilities simulator training

Challenges• Limited natural gas resource with increased

price• Planned LNG projects are behind schedule • Seller’s market insists DES contract and

control the shipping• Needs more developments in homemade

vessels• Limited manpower and crew in shipping

industry

Thanks & Questions?Thanks & Questions?