Ref. Ares(2018)5389783 - 19/10/2018
Global LNG markets
DG Energy Stakeholder Conference on LNG and Storage Strategy
Brussels 22nd September 2015
Methane Shirley Elisabeth LNG vessel
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The following presentation contains forward-looking statements concerning BG Group plc’s strategy,
operations, financial performance or condition, outlook, growth opportunities or circumstances in the
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by Royal Dutch Shell plc for BG Group plc announced on 8 April 2015. By their nature, forward-looking
statements involve uncertainty because they depend on future circumstances, and relate to events, not
all of which can be controlled or predicted. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, no assurance can be given that such
expectations will prove to have been correct. Actual results could differ materially from the guidance
given in this presentation for a number of reasons. For a detailed analysis of the factors that may affect
our business, financial performance or results of operations, we urge you to look at the “Principal risks
and uncertainties” included in the BG Group plc Annual Report & Accounts 2014. Nothing in this
presentation should be construed as a profit forecast and no part of this presentation constitutes, or shall
be taken to constitute, an invitation or inducement to invest in BG Group plc or any other entity, and
must not be relied upon in any way in connection with any investment decision. BG Group plc
undertakes no obligation to update any forward-looking statements.
No representation or warranty, express or implied, is or will be made in relation to the accuracy or
completeness of the information in this presentation and no responsibility or liability is or will be accepted
by BG Group plc or any of its respective subsidiaries, affiliates and associated companies (or by any of
their respective officers, employees or agents) in relation to it.
2
LNG imports by region
200
180
160
Asia Pacific
140
Europe
120
North America
100
mtpa
Other
80
60
40
20
0
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
Source: CEDIGAZ World Outlook (1965
– 1999) and Wood Mackenzie (2000
– 2014)
3
European* LNG regasification capacity
versus imports 2014
60
Regas capacity = existing and under construction
50
2025
40
2014
a
2014 imports
30
mtp
20
10
0
e
e
d
UK
aly
ey
tI
um
ugal
ec
Spain
ranc
urk
F
erlands
T
Gre
Polan
huania
h
Belgi
Port
Lit
et
N
Source: Regas capacity - BG interpretation of Wood Mackenzie (Q3 2015);
2014 imports - BG Group interpretation of IHS Waterborne data (Jun 2015), delivered volumes
4
*Turkey included as regional importer
LNG: changing trade characteristics
LNG trade by contract length
Over the past
250
decade;
Spot and
• Significant growth
short-term
in flexible volumes
200
29%
trade*
– Supply tenders
– Back-stop
markets
150
– Re-loads
mtpa
– Portfolio players /
100
aggregators
71%
– Traders
Mid & long-
term contracts
• Growing cargo
50
diversions
• Increasing
0
competition
1985
1990
1995
2000
2005
2010
between markets
Source: Poten and Partners (2001), GIIGNL (2015)
* Contract duration of 4 years or less (GIIGNL)
5
US: the next supply wave
500
LNG trade
450
forecast
400
New
supply
350
US
a
300
mtp
250
Australia
Supply:
existing and
200
under
Qatar
construction
150
100
50
0
2000
2005
2010
2015
2020
2025
Source: BG Group interpretation of Wood Mackenzie data (Q3 2015)
6
How much US LNG export capacity
will be built?
Proposed LNG supply by region
350
Excludes projects under construction
300
US
250
Canada
(lower
32%
48)
39%
200
a
Other
mtp
29%
150
100
50
0
US (lower 48)
Canada
East Africa
Russia
Australia
Others*
Total trade
2014
Proposed new supply = expansions and new projects (excluding those under construction) – ultimate capacity where known
*Others = Alaska, Nigeria, Iran
Source: US DOE, Wood Mackenzie and various press reports
7
LNG import outlook by region
Pacific Basin
Atlantic Basin
350
350
Middle East
Bunkers
Other Asia
Europe
300
300
China
N. America
S. America
India
Other
250
Asia
250
JKT
China
200
200
mtpa
India
150
150
100
JKT
100
50
50
Europe
0
0
S. America
2005
2010
2015
2020
2025
2005
2010
2015
2020
2025
Source: BG Group interpretation of Wood Mackenzie data (Q3 2015)
8
US LNG DES cost N.W. Europe
10.00
9.00
$3.50
8.00
Toll range
7.00
$2.50
6.00
Btu
5.00
mm
$/
4.00
3.00
2.00
1.00
0.00
HH
Pipe + losses
Toll
Shipping
Source: BG Group interpretation of Wood Mackenzie data (2015)
9
Observations
• Global LNG trade = 240 mt (~330 Bcm gas) in 2014
– Europe* is 2nd largest importing region (~35 mt or ~50 Bcm gas in 2014)
• The LNG trade has evolved significantly over the past decade
– Growing flexible volumes & cargo diversions
• After a period of tightness global LNG market starting to rebalance based
on new supply
• US volumes expected to add further flexibility and liquidity
– With transparent cost
• LNG adds to European gas supply diversity
*Turkey included as regional importer
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