lng developments in the atlantic and indian ocean · lng developments in the atlantic and indian...

LNG Developments in the Atlantic and Indian Ocean

Luke StobbartSenior Pricing Specialist - Atlantic LNG

Natural Gas

Private & Confidential. 2

• New Demand in the M. East and S. Asia

• US LNG

• The Panama Canal

Developments in the Atlantic and Indian Ocean


New Demand in the M. East and S. Asia

Natural Gas


• Pakistan – Exquisite – March 2015

• Egypt - Hoegh Gallant – April 2015

• Jordan – Golar Eskimo – May 2015

• Egypt – BW Singapore – September 2015

New FSRUs in the M. East and S. Asia

Natural Gas


Middle Eastern Demand Profile pre FSRUs

-

500

1,000

1,500

2,000

2,500

3,000

3,500

May

-14

Jun-

14Ju

l-14

Aug-

14Se

p-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15Fe

b-15

Mar

-15

Apr-1

5M

ay-1

5Ju

n-15

Jul-1

5Au

g-15

Sep-

15O

ct-1

5N

ov-1

5D

ec-1

5Ja

n-16

Feb-

16M

ar-1

6Ap

r-16

May

-16

Jun-

16Ju

l-16

Aug-

16

Middle Eastern Demand (Mcm)

Dubai Kuwait

Source: S&P Global Platts

Natural Gas


New Indian Ocean Demand

-

500

1,000

1,500

2,000

2,500

3,000

3,500

May

-14

Jun-

14Ju

l-14

Aug-

14Se

p-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15Fe

b-15

Mar

-15

Apr-1

5M

ay-1

5Ju

n-15

Jul-1

5Au

g-15

Sep-

15O

ct-1

5N

ov-1

5D

ec-1

5Ja

n-16

Feb-

16M

ar-1

6Ap

r-16

May

-16

Jun-

16Ju

l-16

Aug-

16

Demand from the Middle East and Pakistan (Mcm of gas)

Dubai Kuwait Egypt Jordan Pakistan


Natural Gas


New Indian Ocean Demand

-

1,000

2,000

3,000

4,000

5,000

6,000Middle Eastern and South Asian Demand (Mcm of gas)

India Dubai Kuwait Egypt Jordan Pakistan


Source: Platts. Private & Confidential. 8

Where is the supply coming from?

Natural Gas


Qatari volumes increasingly staying in the regionSources of Supply

-

5,000

10,000

15,000

20,000

25,000

30,000

2014 2015 2016

Qatari Exports to M.East and S. Asia - Sep to Aug - Mcm


Natural Gas


Indian Ocean Demand meets Middle Eastern Supply

0

1000

2000

3000

4000

5000

6000Middle East and South Asian Imports by source (Mcm gas)

Middle East Atlantic Pacific


Natural Gas


Northeast Asian demand has been declining

-

5,000

10,000

15,000

20,000

25,000

Jan-

14

Feb-

14

Mar

-14

Apr-

14

May

-14

Jun-

14

Jul-1

4

Aug-

14

Sep-

14

Oct

-14

Nov

-14

Dec-

14

Jan-

15

Feb-

15

Mar

-15

Apr-

15

May

-15

Jun-

15

Jul-1

5

Aug-

15

Sep-

15

Oct

-15

Nov

-15

Dec-

15

Jan-

16

Feb-

16

Mar

-16

Apr-

16

May

-16

Jun-

16

Jul-1

6

Aug-

16

Mcm

of

gas

LNG Deliveries to China, Japan, South Korea and Taiwan


Natural Gas


More Asian Supply coming from the Pacific

-

5,000

10,000

15,000

20,000

25,000Sources of Northeast Asian Supply by Region (Mcm of gas)

Atlantic Middle East Pacific


Natural Gas

. Private & Confidential. 13

Push and Pull

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000Middle Eastern Exports (Mcm)

M. East & S. Asia Atlantic Asia



M. Eastern demand also PULLING from different sources

Natural Gas


Increase in Diversity of Supply

0

1000

2000

3000

4000

5000

6000Indian Ocean Imports by source (Mcm of gas)

Qatar Nigeria Australia Equatorial Guinea


Natural Gas


Increase in Diversity of SupplySources of Supply

2013 McmQatar 11,894

Nigeria 705 Yemen 453 Egypt 342

Algeria 87 Norway 85

2016 McmQatar 19,318

Nigeria 5,215 Australia 1,910

E. Guinea 1,743 Trinidad 1,348 Oman 767

Netherlands 549 USA 489

France 365 Norway 348 Belgium 344 Angola 185

Abu Dhabi 162 Singapore 94

Egypt 91 Spain 90

Malaysia 87 UK 83


Natural Gas


M.E. and S.A Pull on European Reloads

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Mcm

of g

as

NWE Re-exports


Natural Gas


Majority of reloads now delivered to M.E and S.A.

South America(477 Mcm)

15%

M. East and S. Asia

(1,959 Mcm)64%

Far East (643 Mcm)21%

European re-exports for 2016



Going forward…

Natural Gas


• Jamaica – Golar Arctic FSU - 2016

• Malta – Waka Maru FSU - 2016

• Abu Dhabi – Excelerate – 2016

• Colombia – Hoegh Grace – 2016

• Ghana – Golar Tundra – 2017

• Pakistan – BW Integrity – 2017

• Egypt – Out to tender – 2017

Going forward…


US LNG and Sabine Pass

Natural Gas


Versatile supply - no restriction clause

Trains 1 and 2 - will add 9 mtpa to Atlantic capacity

Close to the Panama Canal, South America and Europe

Off takers: Cheniere, Shell, and recently Gas Natural

Sabine Pass – Key Facts

Natural Gas


Sabine Pass Exports

South America69%

Middle East12%

India 8%

Southeast Europe7% F. East

4%

Sabine Pass Exports by Destination


Natural Gas


• Mainly flowing to South America and Indian Ocean

• With only one delivered to the Far East so far

• And two cargoes delivered to Southwest Europe

• None have yet come to Northwest Europe – as is widely expected

US LNG Destinations

South America Middle East South Asia Southern Europe Far East

Argentina Brazil Chile DR Dubai Jordan Kuwait India Portugal Spain China Total

6 4 9 1 1 1 1 2 1 1 1 28


Natural Gas


Volumes expected to come to Europe in the Fall

Henry Hub prices tend to remain flat or dip during this period

While NBP prices tend to rise in the lead up to winter

Less competition for cargoes during the shoulder months

US LNG

Natural Gas


US LNG – Henry Hub


0

1

2

3

4

5

6

7

02/01 02/02 02/03 02/04 02/05 02/06 02/07 02/08 02/09 02/10 02/11 02/12

$/M

MB

tu

Month Ahead NYMEX Henry Hub Settlement Prices

2013201420152016

Henry Hub prices tend to remain flat or dip in the fall

Natural Gas


US LNG – NBP


0

2

4

6

8

10

12

14

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

$/M

MB

tu

Platts asseessed NBP Month Ahead Forward Prices

20122013201420152016

While NBP prices tend to pick up into the fall

Natural Gas


NBP vs. Delivered US LNG

Source: S&P Global Platts at August 18

0.000

1.000

2.000

3.000

4.000

5.000

6.000

Oct Nov Dec Jan Q1

96% NBP Forward Prices vs Sabine Pass Delivered Cargoes ($/MMBtu)

115% HH+Shipping 96% NBP

Natural Gas


Sabine Pass Pricing Model

Fixed fee regardless of whether you lift or not. (Shell - $2.25/MMBtu) Considered as sunk cost

115% Henry Hub 115% of the final settlement price for the NYMEX Henry Hub natural gas futures

contract for the month in which the relevant cargo is scheduled

US LNG – Some background Henry Hub

Natural Gas


NBP Forward

96% NBP

HH Forward 115% HH

115% HH+Shipping Differential

Oct 4.59 4.40 2.93 3.37 3.85 0.73Nov 5.18 4.97 3.01 3.46 3.94 1.25Dec 5.46 5.24 3.20 3.68 4.16 1.30Jan 5.58 5.35 3.32 3.82 4.30 1.28Q1 5.58 5.35 3.05 3.50 3.98 1.59

US LNG – Differentials Widen into the Fall Forward prices

Source: S&P Global Platts at September 19


However, for the time being…

Natural Gas


• We have not seen any cargoes delivered to NWE

• Because premiums outside of Europe still strong enough to divert cargoes

• US volumes still mostly localized to South America

• With some of these using the Panama Canal for the journey

US LNG for the time being…


The Panama Canal

Natural Gas


• Most cargoes have gone to the Pacific Coast of the Americas• Only one cargo has made it all the way to the Far East• More recently two cargoes loaded in Peru and are crossing into the Atlantic

Panama CanalSo far…

Vessel Charterer Destination Cargo source Return voyageMaran Gas Apollonia Shell China Sabine Pass Not Applicable

British Merchant BP Mexico Atlantic LNG Returned to the Atlantic via canal

Maran Gas Delphi Shell Chile Sabine PassReturning to the Atlantic via Magellan

Sestao Knutsen Shell Chile Sabine Pass Returned to the Atlantic via canal

Gaslog Salem Shell Chile ArzewReturning to the Atlantic via Magellan

Oak Spirit Cheneire USA Unladen Not Applicable

Gaslog Saratoga Gas Natural Chile Sabine PassReturning to the Atlantic via Magellan

Methane Becki Anne Shell Trinidad Unladen Not Applicable

Galea Shell Spain Planta de Gas Melchorita Not Applicable

Madrid Spirit Shell Spain Planta de Gas Melchorita Not Applicable



Going forward…

Natural Gas


Panama CanalThe future

0

100

200

300

400

500

600Atlantic Deliveries to Manzanillo and Quintero (Mcm)


Natural Gas


Less demand for Atlantic cargoes in the Pacific


-

5,000

10,000

15,000

20,000

25,000Sources of Northeast Asian Supply by Region (Mcm of gas)

Atlantic Middle East Pacific

Natural Gas


• Seeing the development of geographic localization

• Qatari volumes the moving away from the Pacific towards the new demand centres in the M. East and S. Asia

• US LNG and the Panama Canal mainly servicing the Latin American Markets closest to them

Main takeawaysImplications in the short term

We welcome your feedback

Luke StobbartSenior Pricing Specialist, Atlantic LNGS&P Global [email protected]

mailto:[email protected]

lng developments in the atlantic and indian ocean · lng developments in the atlantic and indian...

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