strategy behind total’s expanding...rapid growth in jkm swap derivative market increase in...
TRANSCRIPT
STRATEGY BEHIND TOTAL’S EXPANDING
LNG PORTFOLIO
JOGMEC
Tokyo, Sept 27th 2019
Philip Olivier
Senior Vice President LNG
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40
60
15
30
China growing LNG customer
Ambitious target for share of gas in energy mix of > 15% by 2030
Air quality policies
Unbundling of pipe gas operation
Increasing regas capacity: +50 Mt/y by 2025
India long-term growing LNG customer
Share of gas in energy mix target: from 5% in 2018 to 15% by 2030
Investment in gas infrastructure
Market opening
ASIA HAS SHOWN A STRONG APPETITE FOR LNGSwitch from coal to gas driven by policies
China LNG imports
Mt/y
2017 20192018
2017 20192018
x1,7
India LNG imports
Mt/y
2
STRONG LNG DEMAND GROWTH DRIVEN BY ASIASupportive government policies for natural gas
0
100
200
300
400
500
600
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Mt
Japan Korea Taiwan China India Rest of Asia (excl C & I) Europe Middle east Other Bunker
9%/y
5%/y
LNG Demand
Mt/y
Reference: Total Energy Outlook
3
200
400
600
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Mt
LONG TERM LNG SUPPLY-DEMAND OUTLOOKA new cycle is about to start
5%/y
Assets in production
Possible FID
Probable FID
7%/y
Reference: Total Energy Outlook
Assets in development
LNG Supply & Demand
Mt/y
4
50
100
2017 2018
60
2016 2017 2018 2019 YTD
2/3 of global LNG sales still sold through long term oil
indexed contracts but…
…trend toward commoditization
Long term contracts for Europe indexed to spot gas prices
Rapid growth in JKM swap derivative market
Increase in short-term and spot trades: from 27% in 2017 to 32% in 2018
First LNG Freight Financial swap
Total LNG’s portfolio well positioned to benefit from
market trends
NEW TRENDS IMPACTING LNG MARKETS
Source: GIIGNL* Short term = < 4 years
JKM derivatives – traded volumes
Mt
Short-term* & spot trades in LNG Market
Mt
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INTEGRATED AND DIVERSIFIED ALONG THE VALUE CHAIN
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LEVERAGING EXISTING NIGERIA LNG FOR A LOW COST EXPANSION
• Valorizing large, low cost Nigerian
conventional gas resources
• Adding 7 Mt/y to existing 22 Mt/y plant
• FID by end 2019 – first LNG in 2023
NLNG T7, 7.5 Mt/y (15%)
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RUSSIA: CAPITALIZING ON GIANT LOW COST RESOURCES
Ramping up Yamal production, pursuing Arctic LNG 2 project
• Trains 1,2&3 producing, ahead of schedule
• Train 4 adding further 0.9 Mt/y
• > 4 Bboe low cost reserves
• 480 kboe/d production
• ~85% of LNG sales indexed to oil
• FID Sept. 2019, first LNG by end-2023
• Leveraging low upstream costs
• Significant synergies and shipping optimizations
• Opportunity to participate in future projects in the area
• Transhipment terminals to optimise shipping
Yamal LNG, 17.4 Mt/y, 30%* Arctic LNG 2, 20 Mt/y, 22%*
* Direct and indirect
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NORTH AMERICA: BUILDING STRONG LIQUEFACTION POSITION
• Train 1 started, trains 2 &3 by mid-2020
(3 x 4.5 Mt/y)
• Cameron LNG brownfield extension
under study*
• Low cost shale gas supply
Cameron LNG, US, 16.6%
• Competitive brownfield
• Phased development: Ph1 at ~3 Mt/y
• FID turn of 2019
• Low cost shale gas supply from Permian
• Total offtake ~1 Mt/y, strong advantage on
shipping cost linked to Asia Pacific location
Energia Costa Azul, Baja California, 10-15%
~3.5 Mt/y equity production by 2025
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PACIFIC BASIN: LEVERAGING PROXIMITY TO ASIAN MARKETS
Moving forward with Papua LNG , Mozambique: unlocking world-class gas resources
• First gas offshore July 2018
• > 3 Bboe reserves with large
liquid content
• 100 kb/d of condensate
production
• All LNG sales indexed to oil
Ichthys LNG, 8.9 Mt/y, 30%
• Favorable reservoir
characteristic
• Low cost brownfield LNG
extension project
• Low shipping costs, close to
Asian markets
• Targeting FID by 2021
Papua LNG, 5.5 Mt/y, 31%
• Giant high quality resources
• Mozambique LNG: leveraging
large scale to lower costs
• ~90% volume sold under long
term contracts
largely oil indexed
Mozambique LNG, 12.9 Mt/y,
26.5%
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● Guanghui Energy / China:
SPA 0.7 Mt/y DES from June 2020 for 10
years
● Taipower / Taiwan:
MOU/HOA 0.9Mt/y DES from January
2024 for
9 years
● Bunkering with CMA CGM 0.6 Mt/y
NEW OUTLETSAccessing new markets through FSRUs and local partnerships
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THANK YOU
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