International GasAsociacion Nacional de Empresas
Generadoras (ANDEG) Energy Forum
Nakul Nair
September 17, 2020
1 September 17, 2020
BloombergNEF coverage
2 September 17, 2020
BNEF coverage
Strategies for a cleaner,
more competitive future
3 September 17, 2020
BloombergNEF’s gas & LNG coverage encompasses all key market drivers
Strategies and technology
Supply
Contracts and pricing
Balances and
trade flows
Demand
Source: BloombergNEF.
• Natural gas and LNG pricing data globally
• Trends in LNG contracts signing and key terms
• Gas pricing mechanisms and benchmarks
• Gas and electricity market liberalization
• Company strategies and gas investments
• LNG buyers and suppliers’ strategies
• Global climate policy analysis and impact on gas
• Technology trends, digitization across value chain
• LNG supply and export capacity
forecasts and breakeven cost analysis
• U.S. natural gas production forecasts
and production cost estimates
• Cross-country pipeline gas flows in
key markets like Europe and China
• Domestic gas production estimates
across Asia and Europe
• Data and maps of producer acreage
by U.S. county and producing basins
• LNG exports/imports tracking via Bloomberg
Terminal’s AHOY JOURNEY <GO>
• Analysis of LNG trade flow developments
• Global LNG netbacks and profitability analysis
– shipping costs and floating storage
• Sector demand analysis across major markets
• Fuel-switching potential analysis for major countries
• Long-term competitiveness of gas in the power,
transport, industry and residential/commercial sectors
• Implications of policy movements on gas demand
• Price responsive and seasonal gas demand estimates
• Economics of renewable natural gas and hydrogen
4 September 17, 2020
Source: BloombergNEF.
Value of BNEF insights and analysis across a spectrum of clients
Long-term global gas
& LNG outlook
Monthly global LNG &
regional gas reports
Seasonal global gas
outlooks
Weekly & daily
updates
Trading Community
& Analysts
CEOs & C-suite
Executives
Business Managers &
Investors
Business Development (Marketing, Origination)
Strategic insights & research topics: Contract and pricing trends, corporate strategy, market reform, technology advancements, sustainability and more.
Regional dynamics & insights: U.S. gas production, Russia-Ukraine gas dynamics, India’s industrial gas demand, China gas in transport, and more.
BloombergNEF Flagship publications: New Energy Outlook, Levelized Cost of Electricity, Climatescope, Power Market Outlooks across the world.
Recurring publications
Databases & Tools: Global LNG netback calculator, EU & North Asia fuel-switching
calculators, global LNG import/export project database, LNG contracts database, and more
• Global LNG supply and demand outlook
• Country/regional gas demand outlooks – China, Japan, Korea, India, South Asia, Southeast Asia, Europe
• Regional LNG supply outlooks and final investment decision watch-lists
• Global gas summer outlook – LNG, Europe, U.S., North Asia
• Global gas winter outlook – LNG, Europe, U.S., North Asia
• Global LNG monthly – import/exports, trade flows, shipping, weather, forecast, and more
• China Gas monthly, EU Gas monthly, U.S. Gas monthly & U.S. Gas balances (quarterly)
• LNG trade updates: China, Korea, Japan, India, Supply
• EU Power & Gas weekly, U.S. gas storage estimates, Covid-19 Indicator
reports (U.S. Oil & Gas, APAC Power, Australia Power & Gas and more)
5 September 17, 2020
Colombia Argentina Mexico
Installed capacity, 2019
Source: PRODESEN, SIE, CENACE, CRE, CNE, CAMMESA, BloombergNEF
Gas50%
Large hydro27%
Oil & diesel10%
Nuclear5%
Coal2%
Small hydro1%
Wind4%
Solar1%
40GWNatural
gas
47%
Oil & diesel
15%
Large hydro
14%
Wind7%
Coal7%
Solar5%
Nuclear2%
Geothermal1%
Small hydro1% Biomass
1%
82GW
Biomass & Waste1%
Coal10%
Gas15%
Large Hydro62%
Small Hydro5%
Oil6%
Solar1%
18GW
6 September 17, 2020
Review of 2019 and Covid-19 impactMajor global trends
7 September 17, 2020
Source: BloombergNEF, BP, Cedigaz Note: * average of Henry Hub, TTF, and Japan Korea Marker (JKM) for 2019 vs 2018
A year of gains
24.2%Gas share in primary energy mix in 2019
+2.3%Gas demand growth in 2019
+3.5%Gas production growth in 2019
-37%Change in gas prices at key global hubs*
+13%Growth in LNG trade in 2019
+2.9%Growth in gas trade in 2019
8 September 17, 2020
Share in global primary energy mix Yearly change in global power
generation, 2019
Global power generation by fuel
type, 2019
Gas growing across the energy sector
Source: BP Statistical Review of World Energy, June 2020.
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2001 2004 2007 2010 2013 2016 2019
-400
-200
0
200
400
Coa
l
Ga
s
Hydro
Ren
ew
ab
les
Nucle
ar
Oil
Oth
ers
TWh
27,005TWh
36,4%
23,3%
15,6%
10,4%
10,4%
3,1%0,9%
27,005TWh
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
%
Oil Gas Coal Nuclear Hydro Renewables
9 September 17, 2020
Source: BloombergNEF, IGU World LNG Report 2020. Note: Pacific includes
Papua New Guinea, Malaysia and Indonesia. Africa includes Cameroon,
Mozambique, Mauritania/Senegal. Equity offtake figures are rounded.
LNG liquefaction project FIDs
Supply rising in most regions
0
10
20
30
40
50
60
70
80
90
100
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
Billion cubic meters per annum
Pacific RussiaAfricaU.S. CanadaAustralia
Source: Cedigaz. Note: C.I.S. is Commonwealth of Independent States.
Global gas supply
960 1.058 1.138
592 613 648
842 885
901
250 234
218 637
666 687
167 164
162 231
244 247 3.678
3.865 4.001
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
2017 2018 2019
Billion cubic meters
Africa
Latin America
Middle East
Europe
C.I.S.
Asia Pacific
North America
10 September 17, 2020
Gas prices in key region EU carbon price allowance Fuel-switching potential in 2020 in
South Korea
Prompting low prices and fuel switching
Source: BloombergNEF Source: BloombergNEF
Source: BloombergNEF, Korea Power Exchange,
KEPCO
0
2
4
6
8
10
12
14
16
ago
14
ago
15
ago
16
ago
17
ago
18
ago
19
$ per MMBtu
Asia, Japan Korea
Marker
U.K. NBP
U.S. Henry Hub
0
10
20
30
40
50
60
2014 2015 2016 2017 2018 2019 2020
EUR/t
EU carbon
price
Required average
carbon price for coal-
gas switching
0
5
10
15
20
25
30
35
40
Jan
-19
Ap
r-19
Jul-
19
Oct-
19
Jan
-20
Ap
r-20
Jul-
20
Oct-
20
TWh
Fuelswitchingpotential
LNG
Coal
11 September 17, 2020
Yearly change in LNG
exports, 2019
Demand, supply and geopolitics shaping trade flows
Source: BloombergNEF Note: LNG exports based on 2019 departure year,
imports based on 2019 arrival.
-5 0 5 10 15 20 25
U.S.Russia
AustraliaEgypt
AlgeriaMalaysia
P.N.G.TrinidadNigeriaOman
CameroonU.A.E.Angola
PeruBrunei
ArgentinaNorway
QatarEq. Guinea
Indonesia
Yearly change in LNG
imports, 2019
-10 -5 0 5 10 15
U.K.China
FranceSpain
NetherlandsItaly
BangladeshBelgium
IndiaPortugal
ColombiaMexicoTaiwan
ChileU.S.
JordanArgentina
EgyptSouth Korea
Japan
Yearly change in pipeline
exports, 2019
Source: Cedigaz
Yearly change in pipeline
imports, 2019
-30 -20 -10 0 10
North America
Latin America
Europe
C.I.S.
Africa
Middle East
Asia Pacific
Billion cubic meters-30 -20 -10 0 10
North America
Latin America
Europe
C.I.S.
Africa
Middle East
Asia Pacific
Billion cubic meters
12 September 17, 2020
Daily industrial gas demand in Italy Daily power demand in Spain Weekly LNG imports
Market recovering from Covid-19 shock
Source: ENTSO-E, TERNA, Snam, Enagas, BloombergNEF Note: ‘No impact’ demand forecasts are based on
historical data, temperatures, cyclical factors, and take into consideration weekends and national public holidays,
but not the impact of Covid-19. The solid blue series represents a 70% confidence interval, the light blue is 95%. Source: BloombergNEF
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
1-e
ne
15-e
ne
29-e
ne
12-f
eb
26-f
eb
11-m
ar
25-m
ar
8-a
br
22-a
br
6-m
ay
20-m
ay
3-ju
n
Billion cubic meters
Europe
China
India
0
5
10
15
20
25
30
35
40
45
50
mcm/d
Actual value
No impact forecast
0
5
10
15
20
25
30
35
GW
Actual value
No impact
forecast
Extreme
lockdown
forecast
13 September 17, 2020
Short-term future of LNG
14 September 17, 2020
Source: BloombergNEF.Source: BloombergNEF.
Three Covid-19 pandemic scenarios Covid-19 impact on LNG demand
Covid-19 Impact: Pandemic duration will determine demand loss depth in 2020
Scenario 1:
Single-wave
pandemic
Scenario 2:
Multiple-wave
pandemic
Scenario 3:
Enduring
pandemic
Key elements
• Virus impact largely confined
to 1H 2020.
• Economic recovery is well
underway in much of the
world from 4Q 2020.
• Covid-19 outbreak continues
into 2H 2020, but gets under
control in early 2021.
• Economic growth returns in
2Q 2021.
• Repeated waves of outbreak
in countries, suppression
measures required into 2021.
• Mid-2021 a treatment or
vaccine is successfully
scaled up and brings the
pandemic under control.
• Economic recovery begins in
Q4 2021.
BASE CASE
300
310
320
330
340
350
360
370
380
390
400
2018
2019
2020
2021
2022
2023
2024
2025
Million metric tons
Scenario 3
Scenario 2
(Base case)
Scenario 1
LNG demand impact• LNG demand could fall by
1.1% in 2020 versus last year.
Demand is likely to recover in
2021 and edge over 2019
levels.
• LNG demand could fall by
4.4% in 2020. Recovery starts
in 2021, but demand is unable
to reach 2019 levels. By 2022,
demand converges with
Scenario 1.
• LNG demand could fall by
5.3% in 2020. It declines
further in 2021 as economic
growth and infrastructure
development is severely
impacted. Recovery comes
around in 2022 and demand
could recover to Scenario 1
levels by 2024.
15 September 17, 2020
August 2020 update: Covid-19 takes its toll on the LNG market, but worst may be over
Source: BloombergNEF, Bloomberg Terminal.
Covid-19 cases globally LNG imports to major markets Futures front-month prices
Chinese and Korean terminals Europe gas storage levels Monthly U.S. LNG exports
16 September 17, 2020
Long term future of LNG
17 September 17, 2020
Source: BloombergNEF.
Source: BloombergNEF. Note: FID is final investment decision. CAGR is
compound annual growth rate.
Global LNG supply-demand outlook
Global outlook: Supply glut continues for over 10 years as demand gap is pushed out
-1.8%
+6.2%
+7.4%
+3.0%
-1.0%
CAGR
(2020-2040)
Supply-demand gap
-250
-200
-150
-100
-50
0
50
100
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
20
36
20
37
20
38
20
39
20
40
Million metric tons
Excess supply in market
Shortfall in supply
18 September 17, 2020
Source: BloombergNEF. Note: Based on BNEF’s base case scenario.
Nameplate capacity by trains shown in full, not prorated. Source: BloombergNEF. Note: FID is final investment decision.
Global LNG supply outlook Expected capacity additions
Supply boom: Market can afford to delay commissioning the next wave of supply
Pacific RussiaAfricaU.S. Canada
Demand
19 September 17, 2020
Source: BloombergNEF. Note: Not all proposed LNG projects shown here, especially small-scale projects and U.S. projects which have not received all their permits.
Global LNG project proposals
Supply project watch list: Ability to progress hinges on securing enough buyers
20 September 17, 2020
Growth and opportunitiesSector and regional analysis
21 September 17, 2020
Source: BloombergNEF. Note: ‘Others’ include fuel cells, direct importers for
Korea and includes non-energy use, agriculture, forestry, fishing, and
unspecified for Europe.
Source: BloombergNEF. Note: Sector shares are aggregated using LNG
demand by sector for various countries. In the absence of sector level
consumption data of LNG, assumptions are made based on total gas
demand, except where LNG demand is known to be driven by specific
sectors (e.g. LNG-to-power projects).
Global LNG demand by sector Gas demand share by sector
Sector growth: Share of LNG in power falls, but rises in industry and transport
China
India
Japan and Korea
Europe
0%
50%
100%
2020 2040
0%
50%
100%
2020 2040
0%
50%
100%
2020 20400%
50%
100%
2020 20400%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2020 2040
%
Others
Transport
Residential &Commercial
Industry
Power0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2020 2040
%
Others
Transport
Residential &Commercial
Industry
Power
22 September 17, 2020
Share of LNG demand by
market
Asia’s demand growth
by country
Regasification capacity
Demand growth: South and Southeast Asia becomes largest import region in 2040
Source: BloombergNEF. Source: BloombergNEF. Source: BloombergNEF.
0
100
200
300
400
500
600
700
800
900
1,000
Million metric tons
Others
Europe
South,
Southeast
Asia
North Asia
OperationalUnder construction
Total
2020
demand
2040
demand
23 September 17, 2020
Latin America
24 September 17, 2020
Source: BloombergNEFSource: BloombergNEF
LNG demand by country, 2010-2040 Brazilian LNG infrastructure
0
5
10
15
20
25
201
02
01
22
01
42
01
62
01
82
02
02
02
22
02
42
02
62
02
82
03
02
03
22
03
42
03
62
03
82
04
0
Other Carribean,Central America
DominicanRepublic
Puerto Rico
Mexico
Chile
Argentina
Brazil
Million metric tons
LNG imports to reach 20MMtpa in 2040
Barcarena FSRU
4.0MMtpa
Pecem FSRU
1.9MMtpa
Guanabara
FSRU
3.7MMtpa
Bahia FSRU
3.7MMtpa
Sergipe FSRU
3.7MMtpa
Gas Natural
Acu FSRU
5.0MMtpaOperational
Proposed
Inactive
Gas power plant
25 September 17, 2020
Change in Latin America LNG imports,
2020 vs 2019
Colombia LNG imports by month, 2017-
2020
Colombia LNG demand spikes amidst low prices
0
20
40
60
80
100
120
140
160
Jul17
Oct17
Jan18
Apr18
Jul18
Oct18
Jan19
Apr19
Jul19
Oct19
Jan20
Apr20
Jul20
Thousand metric tons
-2,5
-2,0
-1,5
-1,0
-0,5
0,0
0,5
Co
lom
bia
Arg
en
tin
a
Ja
ma
ica
Ch
ile
Pa
na
ma
Do
min
ica
n R
epu
blic
Pu
ert
o R
ico
Bra
zil
Me
xic
o
Million metric tons
26 September 17, 2020
Decarbonization of gasHydrogen
27 September 17, 2020
Source: BloombergNEF
The development of decarbonized gas is a crucial next step for climate goals to be reached
28 September 17, 2020
Up to 37% of global emissions could be abated using hydrogen – 22% for less than $100/tCO2Marginal abatement cost curve of using $1/kg hydrogen for emission reductions versus low-cost fossil fuels, 2050
0
20
40
60
80
100
120
140
160
180
0 1 2 3 4 5 6 7 8 9 10 11 12
Carbon price ($/tCO2)
GtCO2/year
Zero-cost
abatement
Methanol
Gas power generation
Space and water heating
Shipping
Glass
Aluminum
Ammonia
Cement
Steel
Cars Buses Trucks
Oil
refining
Source: BloombergNEF. Note: sectoral emissions based on 2018 figures, abatement costs for the use of renewable hydrogen (delivered at $1/kg to large users, $4/kg to road vehicles)
as a substitute for the lowest-cost fossil fuels in use today globally. Actual abatement costs will vary by country, depending primarily on prevailing fossil fuel prices.
29 September 17, 2020
Source: BloombergNEF. Note: Aluminum demand is for alumina production and aluminum recycling only. Cement demand is for process heat only. Oil refining demand is for hydrogen
use only. Road transport and heating demand that is unlikely to be met by electrification only: assumed to be 50% of space and water heating, 25% of light-duty vehicles, 50% of
medium-duty trucks, 30% of buses and 75% of heavy-duty trucks.
Hydrogen could meet up to 24% of the world's energy needs by 2050Potential demand for hydrogen in different scenarios, 2050
Theoretical max Strong Policy Weak Policy
6MMT
Light trucksBuses
Heavy trucks
Ships
Industry
515MMT
Power
439MMT
Buildings
106MMT
Ammonia
Oil refiningAluminum
SteelCement
Peaking power
Space and water
heating
Total energy: 195EJ
Total H2 demand: 1370MMT
99EJ
696MMT
27EJ
187MMT
53MMT
219MMT
123MMT
301MMT21MMT
37MMT123MMT
Glass
Cars
Methanol
Transport
524MMT
30 September 17, 2020
Source: BloombergNEF
Low density makes pipelines the best transport option
0
1
10
100
1.000
1 10 100 1.000 10.000
Distance (km)
Volume (tons/day)
Local Urban Inter-city Inter-
continental
Large
Mid
Small
Very
small
0.06 0.22 1.82
0.05 0.10 0.58
0.76 1.73
3+Ships
3.87
Unviable
Unviable
Transmission pipelines
Distribution pipelines
Trucks
CGH2 LOHCCGH2
NH3
H2 transport costs based on distance and volume ($/kg) 2019
31 September 17, 2020
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