Philip olivier's presentation slides from the 2010 World National Oil Companies Congress
1. World National Oil Companies Congress – 24 June 2010 – London
Dynamics of the LNG markets
Philip OLIVIER
President of GDF SUEZ LNG
2. 2
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London - 24 June 2010
4. 4
London - 24 June 2010
Global LNG production - post-crisis
5. 5
First ever significant decrease in world natural gas
consumption in 2009
Pre recession
forecast
• Pre recession
forecast : 2.6% p/a
• 3‐4 year delay to
recover to 2008
global gas demand
level
• Pipeline gas to
recover in
2014/2015
London - 24 June 2010
6. 6
Pipeline gas and LNG consumption – crisis and
recovery : 2010-2015 Focus
• 2009 assumed gas
overcapacity :
~ 100 BCM
• +1,6% yoy gas
demand growth
expected in 2010‐
2015
• As LNG has to
flow and find a
home, world gas
recovery may first
absorb LNG, and
then pipeline gas
100
BCM
(BCM)
CERA – GDF SUEZ analysis
London - 24 June 2010
7. Natural gas worldwide supply overcapacity
in 2009
7
2009 gas
consumption
decrease
Additional LNG
capacity
2009/2008
supply
overcapacity
50
10
12
12
Europe
N & S
America
Asia
72
30 102
Hypothesis : 2008 supply/demand balanced year, no storage effect taken into account
(BCM) • 2009 assumed gas
overcapacity of 100
BCM originates mostly
from European
consumption decrease
and additional LNG
capacity coming on‐
stream.
Source: GDF SUEZ
London - 24 June 2010
9. 2009 Natural gas oversupply – Europe
2009 European
natural gas
demand
decrease
Additional
redirected LNG
to Europe
(BCM) In 2009 :
Significant impact of the
crisis on the European
natural gas market, and
especially on the
European LNG market
Oversupply absorbed by
pipeline reduction,
domestic production
decrease and storage
9
50
11 63
Natural gas
oversupply
to Europe
Source: GDF SUEZ
Additional
contracted LNG
to Europe
2
London - 24 June 2010
9
10. 2009 Natural gas oversupply – North America
2009 North
American natural
gas demand
decrease
Additional LNG
to North America(BCM) In 2009 :
Minor impact of the crisis
on the North American
natural gas market (20
BCM oversupply vs 770
BCM of natural gas
market, i.e. 2.6%).
Oversupply assumed
mostly absorbed by
storage
10
Natural gas
oversupply
to North America
10
10 20
Source: GDF SUEZ
London - 24 June 2010
10
11. 11
NBP and Henry Hub comparison
In a LNG surplus
context:
• Market
anticipates short
term NBP/HH
convergence, then
slow divergence
• HH becoming
price floor for NBP
Forward curves 2010‐2015
London - 24 June 2010
11
12. 12
European case example: UK LNG needs
• Reduction of UK
domestic gas
production: 31 BCM
from 2005 to 2009
• UK LNG imports in
2009: 11 BCM
(incl. 6 BCM from
Qatar)
• UK LNG needs to
accelerate as
production decline
expected to continue
Source : GDF SUEZ
London - 24 June 2010
12
13. 13
Global LNG production and demand
• Strong sensitivity to pace
of recovery creates huge
uncertainties on total gas
demand
• Current surplus assumed
absorbed by pipelines
• New LNG capacities might
be required in 2014 but
some of the potential
liquefaction projects will
be further postponed
• In the short term, a long
market, but in the
medium/long term, a
potential tighter market
and a need for new
capacities
100 BCM gas bubble
London - 24 June 2010
13
14. London - 24 June 2010
14
Changing supply/demand balance in Asia
• Asian demand
growth: +5%/year
in 2010‐2020
• Many buyers still
waiting before
contracting new LT
supply
• In the short‐term:
Asia will not be THE
destination for
flexible LNG
15. London - 24 June 2010
15
Flexible & uncommitted volumes available
for the Atlantic Basin
• About 35 MTPA
available for the
Atlantic Basin
(incl. Middle East)
between 2013
and 2015