lng supply projects’ competition - platts · lng supply projects’ competition ... platts 16th...

© POTEN & PARTNERS 2008

CONFIDENTIAL

LNG Supply Projects’ Competition Positioning in a Challenging Environment

February 9th 2017

Platts 16th Annual Liquefied Natural Gas Conference

MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

Agenda

1 – Global LNG Market Opportunities and Challenges

2 – Emerging Trends

MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

1– Global LNG Market Opportunities and

Challenges

MONTH 2009


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© POTEN & PARTNERS

FEBRUARY 2017

0

50

100

150

200

250

300

350

400

450

2010 2015 2020 2025 2030

MM

t/y

Americas

Europe

Niche Markets (Asia &

Middle East)

China & India

Japan, Korea, and

Taiwan

Emerging markets drive growth in global LNG

Global LNG Demand Forecast (2010-2030)

FORECAST

Source: Poten & Partners

MONTH 2009


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© POTEN & PARTNERS

FEBRUARY 2017

0

50

100

150

200

250

300

350

400

450

2010 2015 2020 2025 2030

MM

t/y

Supply Opportunity

for New Projects

Supply Under

Construction

Existing supply

LNG Demand

New LNG supply long-term opportunities start in 2022

Global LNG Demand vs. Committed Projects

FORECAST


MONTH 2009


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© POTEN & PARTNERS

FEBRUARY 2017

100

150

200

250

300

350

400

450

End 2016production

Ramp up of existingproduction

Loss of existingproduction

Production underconstruction

Opportunities fornew projects

Market in 2025

Around 28 MMt/y of demand available globally to new LNG

supply projects by 2025

Note: *30.5 MMt/y production decrease includes Trinidad, Oman, Algeria, Nigeria, and Indonesia.

**112 MMt/y nameplate capacity, adjusted for operations and logistics factors.

257

MMt/y

34

MMt/y

98

MMt/y**

28

MMt/y

386

MMt/y

31 MMt/y*

MM

t/y


MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

Many LNG supply projects have challenges

Russia • Many projects but cost and

risk high

• Yamal has taken FID.

West Africa • Delayed by feedgas

availability and high costs

• Cameroon FLNG under

construction and potential

project in Equatorial Guinea

and Senegal/Mauritania

Australia • Will surpass Qatar as # 1

producer in the world

• But priced out of market

East Africa • Delayed by Government

establishing fiscal regime

North Africa • Output dropping (less than

50% utilization at plants) due

to increasing domestic

needs and struggling

production

North America • Canada challenged by high

cost

• US LNG needs substantial

re-marketing of volumes East Med

• LNG projects have struggled

to develop as Cyprus lacks

reserves and policies, cost,

and site challenges in Israel

delay project

Middle East • Domestic consumption has

limited export appetite

• Qatar debottlenecking

possible


MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

0

50

100

150

200

250

300

350

400

450

2010 2015 2020 2025 2030

MM

t/y

East Africa

North America

Australia

West Africa

Qatar

North Africa

Malaysia & Indonesia

Others

Total Demand

North America and Africa to compete for post 2022

incremental LNG demand

Global LNG Supply Forecast (2010-2030)

FORECAST


MONTH 2009


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© POTEN & PARTNERS

FEBRUARY 2017

0

50

100

150

200

250

300

350

400

450

2010 2015 2020 2025 2030

MM

t/y

Supply Opportunty

for New Projects

Supply Under

Construction

Existing supply

Global Demand Base

Case

Global Demand with

China & India Low

Case

New project opportunity projected to be delayed beyond 2025

with lower China/India LNG demand

Global LNG Demand with China & India Low Case vs. Supply Projection

FORECAST


MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

2 – Emerging Trends

MONTH 2009


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© POTEN & PARTNERS

FEBRUARY 2017

• Originally, Asian buyers were acting as

“King Makers”

• Selecting winners – negotiating for better price levels

• Investing in upstream and liquefaction segments

• Bringing in “competitive” loans

LNG

Marketing Project FID Gas

Reserves

Engineering

Design &

Technology

Trend #1: Traditional Asian buyers have lesser appetite for

longer term deals and seeking to become portfolio players

• Presently, Asian buyers have limited

appetite for longer term deals

• Established Asian buyers are reacting to

the market, and seeking to become

“portfolio players/aggregators”

Government

Approval &

Action

Fiscal

Regime

Site

Acquisition Partner

Alignment EIA and

Permitting

Typical Project Timeline

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&uact=8&ved=0CAgQjRw&url=http://www.osakagas.co.jp/indexe.html&ei=aiKGVOuJFoWVyQS-yoLABg&psig=AFQjCNHVwejJu8t1PitYhJccpPA3cy-t3A&ust=1418163178504824

http://www.google.com/url?sa=i&source=images&cd=&cad=rja&uact=8&ved=0CAgQjRw&url=http://www.trademarkia.com/kogas-korea-gas-corporation-79107536.html&ei=fCKGVPzqKIi5yQTK_YDACg&psig=AFQjCNHNFVgL1zqxJC_m80Ron2NuHZlQtw&ust=1418163196758306

http://www.skens.com/sk/main.jsp

MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

LNG


Reserves

Engineering

Design &

Technology

Trend #2: Niche markets are emerging as key opportunities

for suppliers

Key uncertainties in niche markets • Credit ratings

• Seasonality requirements

• Infrastructure requirement and development

• Logistics of small scale

• Economics of small scale

• Timing

Government

Approval &

Action

Fiscal

Regime

Site

Acquisition Partner

Alignment EIA and

Permitting


Asian Niche LNG Demand Forecast

0

10

20

30

40

50

60

2010 2015 2020 2025 2030

MM

t/y

Others

Philippines

Pakistan

Indonesia

Singapore

Malaysia

Thailand

FORECAST

MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

0

10

20

30

40

50

60

2010 2015 2020 2025 2030

MM

t/y

Others

Philippines

Pakistan

Indonesia

Singapore

Malaysia

Thailand

LNG


Reserves

Engineering

Design &

Technology

Trend #2: Niche markets are emerging as key opportunities

for suppliers

Government

Approval &

Action

Fiscal

Regime

Site

Acquisition Partner

Alignment EIA and

Permitting


Asian Niche LNG Demand Forecast Key uncertainties in niche markets • Credit ratings

• Seasonality requirements

• Infrastructure requirement and development

• Logistics of small scale

• Economics of small scale

• Timing

Credit Ratings:

Investment Grade

Credit Ratings:

Non-Investment

Grade

FORECAST

MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

Trend #3: Downstream integration becoming more important

(Demand Creation)

Upstream Liquefaction Transportation Regasification Market

LNG Value Chain Integration

MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

Trend #4: Project costs are decreasing, led by US existing

and expansion projects

0

500

1,000

1,500

2,000

2,500

2010 2011 2012 2013 2014 2015 2016 2017 2018

US

D $

/tp

a

Australia USA Canada Worldwide FLNG

Global LNG Supply Projects’ EPC Costs

Note: Data points reflect FID dates Source: Poten & Partners

MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

Trend #5: Buyers are seeking more flexible terms

Pricing

Destination

Volume

• Seasonality

• Indexation

• Price Levels

• Destination

Flexibility

MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

FEBRUARY 2017

Are you ready for these new trends?

• Established Asian buyers have limited appetite for longer term deals and

are reacting to the market, seeking to become “portfolio players/

aggregators”

• Niche markets are emerging as key opportunities for suppliers

• Buyers are seeking more flexible terms (volume, destination, pricing)

• Project costs are decreasing, led by US existing and expansion projects

• Downstream integration becoming more important (demand creation)

1

2

3

4

5

MONTH 2009


CONFIDENTIAL

© POTEN & PARTNERS

JANUARY 2017

NATURAL GAS & LNG CONSULTING CONTACTS:

AMERICAS (NEW YORK)

Contact: Majed Limam

Email: [email protected]

Tel: +1 212 230 5407

EUROPE, M. EAST, AFRICA

Contact: Graham Hartnell


Tel: +44 20 3747 4820

ASIA PACIFIC

Contact: Stephen Thompson


Tel: +61 8 6468 7942

AMERICAS (HOUSTON)

Contact: Doug Brown


Tel: +1 713 344 2378

lng supply projects’ competition - platts · lng supply projects’ competition ... platts 16th...

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