LNG: a global perspective

Andrew Walker, VP, Global LNG

Methane Shirley Elisabeth LNG vessel

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LNG trade today – a snapshot

• 50 years old

• 240 mt (32 bcf/d)

• 19 exporting countries

• 27 importing countries

• 376 ships

• 10% of all gas consumed worldwide

• 30% of internationally traded gas

LNG - an evolving trade• Driving the ‘globalisation’ of the

natural gas industry

– a global trade

– a diversifying trade

– an increasingly dynamic trade

– a growing trade

• LNG as a global commodity?

– fragmentation

– liquidity

– Asian gas market hub(s)

– trade instruments

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LNG - increasing impact and influence

• Old ‘world order’ of energy rebalancing?

– North America as energy exporter– Rise of ‘new Asia’ as consumers– Energy security in the spotlight in

Europe

• New markets opening

• New market segments opening

• Post-Fukushima energy-policies being set worldwide

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0

5

10

15

20

25

2008 2009 2010 2011 2012 2013 2014 2015

$/m

mbt

u

LNG and gas prices

Oil parity

NBP

HH

Asia long-term proxy

Asia spot

Global recession

Asiarecovery

Fukushimaearthquake

Note: Asia long-term proxy = 14.85% JCC + 0.50Oil parity = JCC = Japanese average crude price

Source: Platts, Heren, Petroleum Association of Japan and Bloomberg (as of 21 Aug, 2014)

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0

100

200

300

400

500

2000 2005 2010 2015 2020 2025

LNG trade outlook to 2025

Existing

Under construction

2014 to 2025CAGR(%) = 4.2 to 5.6

ExternalLNG trade forecasts*

Supply:existingand under construction

Global LNG supply (mtpa)

Sources: Supply (existing and under construction): BG Group interpretation of Wood Mackenzie data (Q2 2014)*Trade: various research house views; (2014): Wood Mackenzie, FACTS Global Energy, PIRA, Poten ; (2013): IHS

CERA, Gas Strategies, PFC

New supply: up to ~155 mtpa

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Global LNG imports by region

0

50

100

150

200

250

300

350

2005 2010 2015 2020 2025

Middle East

Other Asia

China

India

JKT

mtp

a

Source: BG Group interpretation of Wood Mackenzie data (Q2 2014) – delivered volumes

JKT

China

India

OtherAsia

0

50

100

150

200

250

300

350

2005 2010 2015 2020 2025

Bunkers

Europe

N. America

S. America

S. America

Europe

Pacific Basin Atlantic Basin

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Shipping distances to Asia

Source Market Distance

Qatar Japan 6,314

W. Australia Japan 3,748

Nigeria Japan 11,110

Other trades in nautical miles (n)

Source: Dataloy (2014); distance to Japan

W. Russia

E. Russia

US Gulf Coast

W. Canada

9,282 n miles

3,940 n miles

6,747 n miles

Asia Pacific

E. Africa

13,575 n miles

810 n miles

5,186 n miles

E. Australia

3,778 n miles

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Observations

• LNG - a ‘globalising’ trade - growing impact and influence

• Continued strong demand growth – Asia focus

• Next generation of supplies now emerging

• N. American exports are changing the game – evolution or revolution?

• Increasing geo-political overlay as LNG globalises

• A dynamic and interesting time to be in this business !

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